Even in a best-case scenario, new frictions and duplications, with associated costs, will emerge in the European financial services system. The loss of the UK voice from the European system of financial regulation is also negative for Ireland.
There is considerable uncertainty and complexity for firms in dealing with Brexit, regarding, for example contract continuity, portfolio transfers, reinsurance, appropriate governance structures and regulatory treatment of third country branches by both the home and host state. While some firms have robust plans that deal with a range of scenarios, other firms’ plans are not as advanced as they need to be.