The Future of the IFSC: European Financial Centres after the Crisis

For details of this NUI Maynooth, Department of Geography event, to be held at Forfás, see here.

7 replies on “The Future of the IFSC: European Financial Centres after the Crisis”

Canary wharf and Canary dwarf. What future partnership? Bermingham or Bremen? Bremen hopefully.

Reps of the IFSC had well over 20 private meetings in An Taoiseach’s office last year [afaik]; X-Taoiseach Bruton does some PR for them as well; looks like communication lines betwen this segment of the financial system and the political system (and I haven’t even mentioned the matrixsQuid’s EU fixer) are reasonably well developed.

Mestillthinks it might be worth giving the IFSC vatican_status at a nominal rent of fifteen billion p.a.. The board of the BlindBiddy Hedge Fund (BBHF) is supportive and research by the Blind Biddy Hedge School (BBHS) suggests that such a move would reduce one of the main impeditiments to introducing a third tax band for upper_echelon earners in the native economy.

I suspect that the IFSC has an effect on the economy and its cost structure that is similar to what a significant extractive industry would have.
The extractable resource that it is using is our ability to make enforceable commercial laws that are intelligible to the US and UK financial industry.

It may be causing a substantial amount of graduates to focus on a small number of very highly paid jobs. Only a low proportion would subsequently find employment here. Since the work is specialised the rest would have to leave.
As well as that the rates of pay in the IFSC may be forcing up the rates charged for professional work here to the detriment of the competitiveness of the local economy. A version of the ‘Dutch Disease’.

If we are going to sell our law-making capacity we should at least ensure that it either comes with high employment add-ons, or that it more than pays its way in revenue.

“Believe those who search for truth. Doubt those who claim to have found it,” – – André Gide (1869 -1951), Nobel Laureate in Literature 1947.

Two public officials, an Accenture manager who is unlikely to risk controversy, and that just leaves Prof Engelen of the University of Amsterdam, to aim for candour.

Until the introduction of the 12.5% corporate tax, the IFSC was the offshore centre on Dublin’s docklands. Now international financial services can be located anywhere in the country.

An Accenture report in 2010 for a unit of IBEC, the lobby group, put total employment at 32,000. The latest Forfás survey of state agency assisted companies puts employment at 23,000 including 6.6k in Irish-owned firms.

About 10,000 jobs are in fund administration.

It’s not clear what the impact of the financial crisis and the end of ‘light touch regulation’ has been, beyond the official ‘what crisis’ blarney.

In 2007, a global index of financial centres that is based on various criteria and a survey of managers in such centres across the world, ranked Dublin at 22 of 46 centres with Athens at 46; In Sept 2012, Dublin had plunged to 49 of 77 centres with Athens at 77.

Kuala Lumpur wasn’t in the 2007 rankings and it was ranked globally at 25 in 2012.

Dublin was at rank 17 in Europe in 2012, down from 7 in 2007.

There can be quibbles about methodology etc but do not doubt that there would be lots of bragging if the rank was high.

Is this the goal:
A Tale of Two Londons

“The lord mayor’s principal official role, his Web site says, is to be “ambassador for all UK-based financial and professional services.” He lobbies far afield, with offices in Brussels, China, and India, among other places, the better to “expound the values of liberalization” far and wide. The City Corporation and closely linked think tanks issue streams of publications explaining why finance should be less tethered by taxes and regulation. The corporation also has its own official lobbyist, with the delightfully medieval-sounding name of The Remembrancer (currently one Paul Double), lodged permanently in Britain’s Parliament. Local elections in the City are unlike any other in Britain: multi-national corporations vote alongside and vastly outnumber the tiny borough’s 7,400 human residents.”

The article even mentions NAMA.

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