Last Wednesday the Central Bank deputy governor Matthew Elderfield told the Irish Funds Industry Association that change is coming.
Change is coming and it will be significant. As I said my key message to you is engage in the debate and be prepared to adapt.
Adapt indeed – and quickly. Why, because the days of gombeen regulation are rapidly coming to an end.
For decades, Ireland, the Wild West of European finance, allowed and facilitated dodgy financial activity that, ultimately, played a major role in the onset of the current economic catastrophe.
But the good times are coming to an end, the European Central Bank (ECB) is coming to town and, thankfully, the Irish gombeen (non) regulatory regime will be no more.
The ECB will have wide ranging powers including the ability to shut down banks, carry out raids and fine them 10% of their annual turnover for not complying with regulations.
So, not only can Irish citizens breath a sigh of relief that, at last, a truly professional financial regulator will be looking after their interests, they can also look forward to something they have never witnessed before, banks actually being raided and fined substantial sums for robbing their customers and other crimes.
The Irish Central Bank will be (rightly) reduced to the level of ensuring that ECB instructions are properly carried out although, given its record to date, even that task will require major reform and a management cultural change of gigantic proportions.
The only worrying aspect of the new regime is that the Central Bank will retain some oversight of banks and be responsible for consumer protection.
I’m sure, however, that the ECB will quickly realise that even these duties are beyond the capabilities of our Wild West style of ‘regulation’ and take appropriate action.