Protecting and enhancing the Single Market for financial services: a regulatory perspective – Speech by Gerry Cross

• Need for improved coordination between home and host financial regulators
• Customers should be clear about where a business is being run from and who supervises it
• Brexit: the risk of regulatory differences are being significantly reduced

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Speaking at the European Insurance Forum, Director of Policy and Risk, Gerry Cross, noted that the Single Market in financial services has brought many benefits but it faces specific challenges, both from Brexit and other issues which need to be addressed.

Mr Cross said that one of the areas where there is room for further development is that of coordination between supervisors in the authorisation and supervision of cross-border firms. He said that “there is the risk that in certain cases the home state authority may not be well-placed to understand the risks that are being undertaken by the regulated entity in a third country. This is likely to be so only in a limited number of circumstances but nonetheless needs to be guarded against. To this end at the Central Bank we consider it desirable that the home authority consults effectively and efficiently with the host authority.”

Mr Cross added that following the recent well-known failures of insurance undertakings operating on a cross border basis in the Irish market through Managing General Agents, the Central Bank carried out an initial review on how consumers are informed of who the insurer is and where it is located. A letter has been sent setting out needed improvements.

Speaking about Brexit and re-location of parts of UK firms, he said that there has been a risk of divergent approaches amongst supervisors. But significant progress is being made to address this. The Central Bank welcomes the important guidance being developed by the European Authorities on the issue and the approaches they are taking to see that this guidance is followed by national regulators.