European Central Bank (ECB)president Mr Jean-Claude Trichet has warned that inflationary risks are rising in the European Union. Colm Keena reports.

Speaking at the annual dinner of Financial Services Ireland in Dublin last night, Mr Trichet said that economic recovery in the European Union was continuing but that there were "several upward risks to projections for inflation".

These include rising oil prices and excessive credit growth.

He praised the Republic as a "role model" for Europe, saying that its "level of prosperity and quantity of jobs" were tangible evidence of the advantages that the structural reforms the ECB is promoting can bring.

And he repeated his warning against excessive relaxation of the rules of the Stability and Growth Pact.

The chairman of Financial Services Ireland, addressing the function, called for a review of a number of the more onerous corporate governance and regulatory measures recently introduced.

Mr William Slattery said the cumulative effect of recently introduced company and financial services legislation had been significant.

The group represents companies active in the financial services sector in Ireland and is part of the employers' body IBEC.

"It cannot be emphasised too strongly that, if the regulatory environment in Ireland is more onerous than in other competing jurisdictions, this has a significant negative impact on the competitiveness of Ireland as an international financial services jurisdiction," Mr Slattery said.

He said that four major pieces of company and financial services legislation had been enacted in the State in recent years providing for the establishment of the Irish Financial Services Regulatory Authority, the Office of the Director of Corporate Enforcement and the Office of the Accounting Regulator.

"I believe that, even at this early stage, some of the more onerous provisions should be reviewed."

Each of the new authorities has comprehensive powers of enforcement that, in terms of their potential impact on individual directors and managers, have wide-ranging implications.

"Already we have evidence of duplication of inquiry raising issues of fairness, proportionality and double jeopardy," he said.

"It is essential that clear demarcation lines be agreed between our different regulatory authorities as regards responsibility for financial services activity, so that these problems are avoided."

Mr Slattery said a recent survey showed that employment in the international financial sector now stood at more than 16,000. The jobs were surprisingly well distributed around the State, he said.

Mr Slattery said the success of the Irish-based international financial sector was the product of ambition and the right environment.

He said Europe should aim to become the centre of global cross-border financial services activity.

"The specialist international financial centres within the EU, of which Ireland is now proud to be part, require flexibility within the EU regulatory environment to be able to respond speedily to global market trends."

Mr Slattery said he believed the US was not competitive for non-US business because of its US-centric regulatory environment.

"Europe should not make the same mistake," he said.

Mr Slattery added that he hoped the incoming European Commissioner for the Internal Market, Mr McCreevy, would take up the challenge of embracing the necessarily flexible regime "with his characteristic flair and determination".