Speech by Minister Donohoe at the FSI Annual Lunch 2018
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Good afternoon Ladies and Gentlemen. I am delighted to be here with you today and I would like to thank FSI for inviting me to speak with you today.
Economic and Fiscal Developments
I would like to start by giving you an overview of our economy. Our recovery is continuing at a robust pace. GDP grew by 7.8 per cent in 2017. Recovery is perhaps most clearly evident in the labour market with employment growth of 2.9 per cent recorded in 2017 over 2016, representing the creation of over 61,300 additional jobs over the year.
In terms of our fiscal outlook, public finances are continuing to move in the right direction and are being placed on a more sustainable footing, with a balanced budget in sight and a falling debt ratio.
One of the challenges we face is to build upon these economic and fiscal successes, and to ensure that our recovery continues to grow at a strong and sustainable pace.
Now turning to developments in financial services at European level.
Pan European Personal Pension Product
There are a number of EU financial services dossiers of interest to this audience progressing at EU level. I know you have been engaging with officials on these files and I appreciate your views. I just wanted to mention here one of the files that is the Pan European Personal Pension Product.
Department of Finance officials are very engaged on pension developments at a European level. Negotiations are ongoing at Council to develop a Pan-European Personal Pension Product – or ‘PEPP’. The European Commission announced their proposals for the PEPP in June 2017. The aim of the proposal is to lay the foundations for a safer, more cost-efficient and transparent market in affordable and voluntary personal pension savings that can be managed on a pan-European scale. Our officials are constructively engaging with our European colleagues and domestic stakeholders on the development of PEPP to ensure Irish interests are reflected and that a successful product is created.
As many in this room will no doubt be aware, we are now in the fourth year of our International Financial Services 2020 Strategy (IFS2020).
Against the backdrop of the increasingly competitive and dynamic international environment for financial services, our aim is to increase the numbers employed in the sector by 30% or 10,000 net new jobs by 2020.
We are on track to achieve this target with almost 7,000 net new jobs created in the first three years of the strategy.
As part of the development of the IFS2020 Action Plan 2018, my colleague, Minister of State Michael D’Arcy TD, identified six key priority areas for 2018:
- Sustainable Finance
- The development of Ireland’s regions for IFS
- Education and skills
- Aviation finance
- Financial market infrastructure, and
- Investment limited partnership legislation.
The six areas look at both capitalising on opportunities in new and emerging areas such as sustainable finance, while also continuing to improve our environment in sectors where we already excel such as aviation finance.
Education and Skills Measures
IFS2020 also places a strong emphasis on education and improving Ireland’s offering in terms of skills and talent. One education measure that I should note here today is the International Financial Services apprenticeships offered by Financial Services Ireland which have been up and running since September 2017. The delivery of these apprenticeships is a really important step in improving Ireland’s financial services offerings as a whole and I would encourage all of you here today to get involved in these programmes in any way that you can to help lend your financial services expertise. As part of IFS2020, we have seen the development of apprenticeships across a number of subsectors in financial services such as accounting, FinTech, insurance and data analytics. These apprenticeships are designed for a broad range of applicants from school leavers to those looking for a career change.
New Strategy for IFS
While IFS2020 has served our financial services environment well for the number of years it is vital we continue to look ahead to what our offering will look like in the longer term.
The new strategy should provide the ecosystem to continue to enhance the opportunities for the sector, and to ensure Ireland continues to be recognised as a global location of choice for international financial services.
A series of targeted and focussed consultation on the content of the strategy will take place in the coming months.
European Financial Forum (EFF)
I’d like to highlight the European Financial Forum, the Forum has become a flagship event of the financial services calendar and is a core part of the IFS2020 Strategy.
In 2018 we heard from headline speakers such as Valdis Dombrovskis; Vice President of the European Commission; Colm Kelleher, President of Morgan Stanley; and Mike McGavick, CEO of XL Group to name but a few. I can confirm that the fourth annual EFF will be held once again in Dublin Castle on 13 February 2019 and I look forward to seeing some of you in attendance next year.
Some Brexit announcements
Public announcements in the international banking sector include CitiGroup; JP Morgan; Bank of America Merrill Lynch; Toronto Dominion; Barclays. There have also been announcements made in respect of the Insurance and Reinsurance sectors recently. These include: XL Catlin; Chaucer; Legal and General; Beasley Re; Royal London; Everest Re Group; Marine insurers The Standard Club, and North P&I Club have also announced their intention to establish operations here.
In September, Kroll/KBRA became the first ratings agency to announce that their EU HQ location would be in Dublin, and this was followed recently by Thomson Reuters’ announcement relocating their FX Multilateral Trading Facility.
[Some firms have indicated to officials they will not be in a position to publically announce Brexit relocation activity due to commercial and other reasons.]
To conclude, the Irish financial services industry has come a long way since the establishment of the IFSC in 1987. In the intervening years the industry has grown dramatically to become a global leader and major contributor to the Irish economy.
While there are challenges ahead, the industry appears to be well placed to face these. We share the goals of growth and development for the industry and look forward to continuing our collective efforts to develop Ireland as a hub for investment funds.
Thank you again for the opportunity to speak with you this afternoon.
Contact: Aidan Murphy, Press Officer, Department of Finance – 085 886 6667