The Regulatory Environment
There has been a significant increase in the level of focus on regulatory and compliance practices in Ireland over recent years. This has been partly driven by the continuing success of Ireland as an E-commerce hub and by a heightened interest in consumer protection and improved 'business conduct'.
The current Irish financial services regulatory environment is well developed but is also evolving quickly. This is both a function of the Irish Government's desire to maintain Ireland as an attractive location for e-commerce and financial services generally, and also a function of reactions to recent well-publicised instances of non-compliance within the domestic banking industry.
Perhaps the most fundamental development in this regard has been the recent announcement by the Irish Government to restructure the current Irish regulatory framework, through the launch of a single financial services regulatory authority, the Irish Financial Services Regulatory Authority (IFSRA).
It is anticipated that this new authority will place an equal focus on consumer protection and prudential supervision. The regulatory authorities are also placing increasing attention on regulated entities' code of ethics and overall corporate governance. EU and international regulatory developments are also having a significant impact on the industry.
In particular, the far-reaching and fundamental changes to capital adequacy as proposed in the Basel II proposals of January 2001 will represent a significant readiness challenge to the industry. Existing financial service institutions and those considering locating in Ireland must keep abreast of new Irish, EU and international regulatory developments and develop efficient internal controls and processes for ongoing compliance.
Our Regulatory Advisory Team is well positioned to assist financial service institutions in meeting these new regulatory challenges.
