MONETARY union will have a detrimental effect on the Irish financial industry, the economic conference in Kenmare was told.

Mr Dan Montgomery, chief executive of Montgomery Govett, said EMU would be an "unmitigated disaster" for the Irish fund management industry.

The pension fund industry was likely to come under competitive pressure as a result of the imposition of the euro on the Irish financial system, he said.

He said all the countries in monetary union would become our "home market".

The ability to manage specifically Irish assets then became less important and competitors would then consist of any asset manager with experience in managing euro assets, he added.

But Ms Anne Fitzgerald, chief executive of the Irish Association of Fund Managers, told The Irish Times that Mr Montgomery was being overly negative.

"We have huge expertise in managing international equities," she said. "If we can capitalise on that, there should not be so much of a problem."

She pointed to Irish fund managers which are now managing money for US groups as proof that Irish institutions could win in international competition. If fund managers could be attracted into the IFSC, it would copper fasten our position.

Ms Helen Jones, from the Bank of England told delegates Britain was making ready progress in its preparations for EMU, even though sterling itself might not be a member.

She insisted that London would not lose its pre eminence as a world financial centre.

She also pointed to the "steady flow" of banks from other countries which have been setting up European headquarters in London.