Irish trade not yet impacted by Brexit - Central Bank

Brexit is still expected to have negative effect on Irish economy depending on trade arrangement

The Central Bank of Ireland, New Wapping Street, North Wall Quay. Photograph: Alan Betson/The Irish Times

The Central Bank of Ireland, New Wapping Street, North Wall Quay. Photograph: Alan Betson/The Irish Times

 

There has been no evidence as yet that weaker UK growth or the weaker sterling exchange rate has had an adverse impact on Irish trade, a Central Bank of Ireland task force found.

According to the minutes from the December Central Bank commission meeting, a Brexit Task Force report suggests that while there has yet to be any significant impact, “the expectation remained that Brexit would have a negative effect on the Irish economy, the extent of which would depend upon the terms of new trading arrangements”.

For banks, the Central Bank said the impact primarily related to effects on loan portfolios and the could have profitability implications. In the insurance sector, it noted a number of entities which have direct business with the UK. For those entities, the Central Bank said a hard Brexit could have a “material impact on their business models” and noted an initial assessment of plans indicated that some “at-risk businesses were still not as prepared as the bank would expect”.

Ed Sibley, the bank’s deputy governor for prudential regulation, told the meeting the bank was working very actively in relation to wider European engagement, “particularly to reduce the risk of regulatory arbitrage”.