DUBLIN – The Banking and Payments Federation of Ireland (BPFI) is urging for a simplification of banking regulations in Ireland and across the European Union. In a new report, the federation argues that the current system is overly complex, costly, and puts Irish financial firms at a competitive disadvantage.
The report, titled “Regulating for Growth – A Roadmap for Simplification,” contains 52 recommendations for the Central Bank and the Department of Finance. While the BPFI insists these proposals are not a call for deregulation or a reduction in capital and liquidity standards, they are aimed at streamlining the regulatory environment to improve competitiveness and attract investment.
Key Areas for Reform
The BPFI has highlighted several key issues, including:
- “Gold-Plating” of EU Rules: The federation claims that Irish regulations “go above and beyond the requirements of European standards.” This creates an unnecessary burden on firms, can deter international investment, and may encourage existing firms to relocate. The BPFI’s chief executive, Brian Hayes, stressed the need for a harmonized approach across the EU, ensuring the same rulebook applies in all member states.
- “Local Single Rulebook”: The report calls for a single, clear rulebook for firms operating in Ireland. The BPFI argues that the current approach is often inconsistent and unpredictable, leading to an “unnecessary administrative burden” for both financial institutions and regulators.
- Proportionality: The federation has also recommended a more transparent and consistent approach to “proportionality.” The current “one-size-fits-all approach” applies complex regulations to all firms, regardless of their size, complexity, or risk profile. This results in an unduly burdensome and inefficient outcome for smaller institutions.
A Focus on Efficiency, Not Deregulation
According to Brian Hayes, the proposals are designed to make the regulatory code “more simplified, more efficient and more cost effective” for both the industry and public authorities. He emphasized that the goal is not to diminish the high standards that make the Irish banking sector resilient, but to reduce the administrative burden and costs that exist in other areas of regulation. The BPFI notes that there are 35 banks operating in Ireland, including three domestic retail banks (AIB, Bank of Ireland, and PTSB) and many smaller entities.
