Thursday, February 19, 2009

Ireland's financial industry

The following is from the introduction to the resultant report:

Over the last 15 years Ireland has been exceptionally successful in attracting international financial services companies to locate here. The list of international companies with operations here is a “who’s who” of the international financial services sector – Citigroup, JP Morgan Chase, ABN AMRO, ING Group, MBNA, Merrill Lynch, State Street, Unicredito and AIG to name but a few. These companies have been attracted to Ireland for a variety of reasons, including an attractive fiscal and regulatory environment; availability of highly skilled educated workforce; favourable relative cost structure; robust telecoms infrastructure; political stability; and by effective marketing. However, over the last couple of years many in the industry believe there has been a loss of momentum and a slowdown in the growth of the international services sector.

Few would argue that the global financial services industry is undergoing major change at present. Business models are changing because of advances in technology, advances in telecommunications and the impact of globalisation. The European market is gradually becoming more integrated partially driven by EU initiatives such as the Financial Services Action Plan.
Furthermore, Ireland’s attractiveness as a location for international financial services has also undergone major changes over the past 5 years or so.

The corporate fiscal environment is still very favourable although other jurisdictions have emulated Ireland in this respect. The availability of skilled labour is even greater now having been supplemented by returning emigrants from the US and the UK in particular. The telecoms infrastructure has also improved considerably. Notwithstanding these positive developments there are other factors that are less positive. Although Ireland still has cost advantages over many international centres, it is no longer considered to be a low cost location. The cost of skilled labour and property has increased relative to other markets in recent years. In addition other countries/regions have “upped their games” considerably in terms of marketing the attractiveness of locating there.

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