Ireland Gets Financial Services Regulatory Body

by Amanda Banks, Tax-news.com, London

18 April 2001

The Irish government has announced the formation of an Irish Financial Services Regulation (IFSR), following recommendations made in the McDowell Group Report which called for the integration of financial services regulation in Ireland.

The IFSR will govern financial sectors including funds, banking and insurance as well as consumer protection. A financial service ombudsman will also be created to manage customer complaints. Charlie McCreevy, Ireland's Minister for Finance, said: 'The overall aim is to develop a renewed focus on consumer issues, while facilitating the development of a competitive, modern financial system. We need to ensure that there are no obstacles to an effective regulatory system which ensures the pricing of financial products is transparent and competitive. It must also ensure institutions have high standards of decency, probity and fairness.'

Mike Kemp, chief executive of the Irish Insurance Federation, told the Irish press: 'The structure is an inevitable compromise between those who wanted the Central Bank to take over all regulation and the opposing view in favour of a new body with no historical baggage.'

And the Irish Bankers Federation (IBF) says it has welcomed the government's decision to set up the new structure for financial services regulation in Ireland. Although the IBF describes the new regulatory structure as 'complicated', it has the potential to meet key objectives such as:

• providing world class regulation to the Irish Financial Services Sector
• meeting European Central Bank obligations under the Maastricht Treaty
• ensuring that consumer protection and prudential supervision are effectively co-ordinated within the new regulatory regime
• retaining the existing expertise within the current regulatory bodies
• providing a one-stop shop for the regulation of all financial services
• providing, through the advisory panels, mechanisms where the views of consumers and the industry can be channelled to the Irish Financial Services Regulatory Authority

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