Dublin’s financial services expected to benefit from Brexit
Survey of investment professionals reveals 62% believe Dublin will gain from EU loss
London: more than 80 per cent said the city as a financial centre would suffer due to Brexit. Photograph: iStock
Could Dublin’s financial services sector benefit from Brexit? A survey from an association for investment professionals is the latest to claim that it will.
But the research from the CFA Institute also expected Frankfurt would see some benefit from Britain exiting the European Union. It questioned 2,000 investment professionals around the world and found 62 per cent said Dublin would see a positive impact in its financial services sector, with 69 per cent believing Frankfurt would also gain.
More than 80 per cent said London as a financial centre would suffer due to the decision to leave the European Union, and 60 per cent of EU respondents said they expected local financial services organisations with a presence in the UK would cut back. Only 44 per cent of non-EU respondents said they expected their local companies to reduce their UK presence.
“There is a lot of uncertainty about what is going to result from Brexit with a lot of potential negatives for Ireland and the Irish economy,” CFA Society Ireland president Fran Carter said. “But one positive from the survey by our parent institute is that Dublin’s attractiveness as an international financial centre will be significantly boosted by Brexit.”
The chief executive of CFA’s UK arm, Will Goodhart, said the survey made challenging reading for the financial services sector in the UK and for the policymakers that working on the Brexit negotiations.
“As we have seen in recent times, things can change rapidly, but as it stands a great deal of work will need to be done to maintain the City’s competitiveness as a global financial centre and to secure the broader economic benefits that flow from that,” he said.
Some are anticipating further upheaval, with about half of respondents expecting further withdrawals from the EU.
IDA Ireland, the State agency in charge of attracting foreign investment, made it clear within hours of the UK referendum outcome last month that it would look to capitalise on the British vote.
Ireland is home to €3 trillion of investment funds, money market funds and special purpose vehicles as of the end of 2015, according to Central Bank data. The extent to which financial services companies and funds will seek to move business from the UK will ultimately depend on the nature of its divorce agreement from the EU and whether Theresa May’s government retains its access to the single market, according to industry observers.
However, others, such as economists at Deutsche Bank have warned that a dearth of office space, housing, school places and other infrastructure in Ireland, amid underinvestment during the financial crisis, may limit the extent to which Ireland may be able to poach investment and jobs from the City of London.