Will the IFSC Benefit from Brexit? – Business Insurance

Will the IFSC Benefit from Brexit?

There has been talk that up to 300,000 jobs could come to the financial sector. The Central Bank is readying its resources for fa massive influx of applications but the future remains unclear.

Brexit has put the IFSC centre stage and journalists are suggesting Dublin could benefit  as UK based financial institutions seek alternatives for their European businesses.

Companies such as Morgan Stanley and Legg Mason may move some of their operationsto Dublin, thereby creating the financial services jobs.

Will Brexit hurt Dublin?

Not only could it hurt London as a financial services centre but it could hurt Europe as well.

“ Less international finance will come to London, but that doesn’t mean it will still come to Europe, a lot of confusion which isn’t good for any marketplace”.

Large financial centres such as London, Singapore and Hong Kong is where capital goes, and it is to these centres that major financial players may now direct their attentions.

“Dublin and other financial centres might gain, but ultimately they’ll be gaining a larger share of a shrinking pie,”

Sarah Goddard, chief executive of the Dublin International Insurance & Management Association (DIMA), thinks that uncertainty will be problematic.

“London is one of the major centres for global insurance and that (Brexit) will have potentially a profound effect,” she says, adding, “ uncertainty is not the lifeblood of a sustainable insurance or reinsurance business.”

A lot of the business done in Dublin originates in London because of the proximity of the two cities.

Many deals are done out of London for example, with the subsequent structure facilitated in Dublin. If this business no longer comes from London, will professionals elsewhere think of Dublin as someone in London would have?

But it does stand to benefit Passporting

The biggest problem for UK financial services companies outside of the EU is that they will not be able to “passport” their services throughout the EU under freedom of services. This could be a huge opportunity for Dublin.

Some of the old arguments for London, such as the time zone, it’s English speaking, apply to Dublin as well. It is a good location and tax friendly,

Can the Regulator Cope

Regulation might be seen as a problem, although I would not agree here. It has a very light touch still.

Could the Central Bank cope with an avalanche of applications? They will not comment on whether there have been any applications, but say that they will be able to cope.

Acknowledgement to the Irish Times http://bit.ly/298HCR8

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