Ireland to contest Luxembourg’s right to host banking authority

Luxembourg has beaten Dublin to secure AIG, Blackstone and M&G bases post-Brexit

 The governor of the Central Bank Philip Lane. He said this week that Ireland would not be engaging in regulatory arbitrage

The governor of the Central Bank Philip Lane. He said this week that Ireland would not be engaging in regulatory arbitrage

 

The Irish Government is set to contest Luxembourg’s claim on Thursday that it has a legal right to become the new base for the European Banking Authority (EBA) as the battle for business falling out from Brexit moves up a notch.

The Grand Duchy’s prime minister Xavier Bettel has told the European Council in a letter that Luxembourg had the legal right to host the London-based EBA after Brexit, citing an EU agreement going back to 1965 where European leaders had said they were “willing” to locate EU bodies “concerned with finance” in the country.

However, a spokesman for the Department of Finance said Ireland was continuing to actively pursue its bid for the relocation of the EBA to Dublin, with Eoghan Murphy, the Minister of State with responsibility for financial services, having raised the State’s aim at a meeting recently with the European Commission’s vice-president Valdis Dombrovskis.

“As an English speaking and well-established financial services centre, we believe that Dublin offers the least disruptive option for EBA relocation,” the spokesman said. “To date, Ireland’s bid has been well received. The ultimate decision on relocation will be a matter for the European Council.”

Financial services

AIGBlackstone

Mr Murphy lodged concerns with the commission earlier this month about the conduct of other jurisdictions in the race to win business from the City of London, highlighting that rivals are engaging in regulatory arbitrage.

Central Bank governor Philip Lanes made it clear in a speech this week that Ireland would not be going down a similar route.