Give Central Bank competition mandate – BPFI
The organisation that represents the country’s main banks has called for legislation that would give the Central Bank a competition mandate for the sector.
Banking and Payments Federation Ireland (BPFI) says that the Central Bank’s statutory mandates are currently focused on financial stability, prudential soundness, and consumer protection.
While acknowledging that these objectives are “critical”, it believes that this leads to competition, competitiveness, and the overall growth of the financial-services sector being “secondary considerations”.
BPFI wants legislation to place “an explicit legal duty” on the regulator to consider and balance these objectives in all its regulatory, supervisory, and policy-making activities.
‘Gold-plating’ EU rules
The call comes in a report on regulation of the banking sector that has been submitted to the Department of Finance and the Central Bank.
The report, Regulating for Growth – A Roadmap for Simplification, calls for changes in regulation to cut costs for businesses and position the banking sector to address investment gaps.
The report calls on the Government to avoid ‘gold-plating’ EU rules – introducing domestic regulations that go above and beyond EU requirements – and presses for a ‘local single rulebook’ to bring greater clarity to supervisory expectations for firms operating in Ireland.
It also calls for a formal, time-bound ‘regulatory pause’ on the introduction of non-critical new financial-services legislation by the European Commission, in conjunction with EU co-legislators.
‘Stream’ of new rules
The organisation says that this is needed to address “the near-constant stream of new directives, regulations, and implementing technical standards to which the European financial-services sector is subjected”.
The BPFI also wants more proportionality in how rules are applied, saying that a ‘one-size-fits-all’ approach leads to an “unduly burdensome and inefficient outcome for smaller institutions, placing them at a competitive disadvantage relative to their larger peers and discouraging new market entrants”.
The report calls for a review of Irish guidelines on outsourcing, which the BPFI says impose stricter notification, due-diligence, and risk-assessment demands than EBA (European Banking Authority) guidelines.
‘No light-touch regulation’
BPFI chief executive Brian Hayes said that it was time for “a reset”, after what he described as “a decade and a half of intense EU regulatory reform”.
“It is equally important to note that this report does not argue for deregulation – no bank operating in Ireland is arguing for light-touch regulation,” he added.
“With Europe’s competitiveness under mounting pressure, there is now a clear consensus across the EU, from both public and private sectors, that overly complex regulation is diminishing EU growth,” Hayes stated, adding that Ireland needed to be “front and centre” in this debate.