Central Bank splits markets unit as enquiries surge post-Brexit

Philip Lane to set up financial stability directorate in biggest overhaul since his arrival

 Philip Lane, Governor Central Bank: he is  setting up a financial stability directorate and the role of corporate affairs director. Photograph: Dara Mac Dónaill / The Irish Times

Philip Lane, Governor Central Bank: he is setting up a financial stability directorate and the role of corporate affairs director. Photograph: Dara Mac Dónaill / The Irish Times

 

Central Bank Governor Philip Lane is to split the organisation’s key markets supervision division into two units as it deals with a surge of enquiries from London-based investment funds and firms following the Brexit referendum.

Under Mr Lane’s first major organisational overhaul since he took over the helm of the Central Bank last November, the institution, which employs about 1,685 people, is also setting up a financial stability directorate and role of corporate affairs director in the near future.

Staff were told about the restructure late last week. “Internal changes include the establishment of two new directorates to replace the current Markets Supervision Directorate, an Asset Management Supervision Directorate (AMSD) and a Securities and Markets Directorate (SMD),” a spokeswoman for the Central Bank said, declining to give a reason for the split.

All the new roles, communicated to bank staff last week, will be advertised in the national media “in due course”, the spokeswoman said.

Director quits

The move comes after the institution’s director Gareth Murphy quit last month after six years to return to the private sector. He previously worked with the Bank of England, US banking giant JP Morgan and the now-defunct hedge fund management firm Long Term Capital Management.

Mr Murphy’s role spanned the supervision €1.79 trillion of Irish-domiciled international investment funds, investment firms and supervision of stockbrokers and other securities firms.

He also recently spearheaded work to search for, and understand, risks in the unregulated part of the world of shadow banking, which covers financial activity taking place outside banks, as part of global efforts led by the Washington-based Financial Stability Board.

It is expected that the new asset management supervision directorate being set up by the Central Bank will concentrate on the impact of Brexit, as UK-based funds weigh redomiciling funds and asset management business to maintain access to the EU market.

Sources say the Central Bank has seen a sharp increase in enquiries from financial firms since Brexit as they explore contingencies. IDA Ireland is competing against EU financial hubs such as Frankfurt, Paris and Amsterdam to lure operations from the City of London.

Law firms eye Ireland

While some financial services firms have privately expressed concern about the Central Bank’s appetite and capacity to approve a wave of post-Brexit business, the bank’s deputy governor Cyril Roux told industry figures in July that the organisation “remains committed to providing a clear, open and transparent authorisation process while ensuring a rigorous assessment of the application against regulatory standards”.

In the latest sign of increased focus on Ireland as an alternative for financial services business to London, following the Brexit referendum, the Telegraph in London reported over the weekend that a number of top law firms, insurers and asset managers in the City have quietly appointed property agents to seek out new offices in Dublin.

Corporate law firms Freshfields Bruckhaus Deringer, Slaughter and May, and Allan & Overy are among those considering developing business in Ireland, according to the newspaper. Asset manager Hermes, which has £26 billion (€30.3 bn) of funds under management, is among others exploring contingencies, it said.