Financial Crime World

Central Bank of Ireland: Addressing Key Areas for a Resilient Financial System

The Central Bank of Ireland (CBI) has been actively working on various fronts to ensure the stability and resilience of the financial system. In recent years, the CBI has focused on addressing key areas such as Brexit, sustainable finance, technological innovation, and individual accountability.

Brexit: Mitigating Risks for a Stable Financial System

The CBI has taken proactive steps to mitigate the risks associated with Brexit, focusing on maintaining cross-border financial services between the European Union and the United Kingdom. The macroeconomic impact of a trading arrangement after the Brexit transition period represents the main source of risk to the financial system as a whole.

  • The effects of the COVID-19 pandemic have amplified the potential downside of economic risks to the overall economic outlook, differing by region and sector.
  • The CBI continues to monitor the situation closely and take necessary measures to ensure the stability of the financial system.

Sustainable Finance: Supporting a Greener Economy

Sustainable finance has risen up the regulatory agenda, with the CBI playing a key role in financing the transition of the economy to a more sustainable form. The CBI works closely with the European Banking Authority (EBA) on its Sustainable Finance Action Plan.

  • New reporting requirements for credit institutions have been proposed under the Corporate Sustainability Reporting Directive (CSRD), which aims to expand the scope and introduce more detailed requirements.
  • The CBI is committed to supporting the development of a greener economy and promoting sustainable finance practices.

Technological Innovation: Harnessing the Power of Technology

The CBI has emphasized the importance of technological innovation, including big data and algorithms, to assess the risks posed by inappropriate use and information asymmetries. Developments around digitalization, cloud technology, and blockchain have accelerated during the COVID-19 pandemic.

  • There is an increased focus on consumer protection and limiting the impacts of technology failures and cyberattacks.
  • The CBI recognizes the potential benefits of technological innovation and is committed to creating a regulatory environment that supports its development.

Individual Accountability: Assigning Regulatory Responsibility

The CBI has advocated for legislative change to assign regulatory responsibility to individuals working in regulated entities. A new Individual Accountability Framework will be established, consisting of four elements:

  • New conduct standards
  • Senior Executive Accountability Regime (SEAR)
  • Enhancements to the existing Fitness and Probity Regime
  • Changes to enforcement investigations and enquiries process.

The CBI is committed to promoting individual accountability and ensuring that individuals working in regulated entities are held responsible for their actions.