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Banking Regulation in Ireland: Key Developments and Trends

Sustainability and Climate Change

Ireland’s banking sector is taking steps towards sustainability and addressing climate change. The Taxonomy Regulation and Corporate Sustainability Reporting Directive (CSRD) are key initiatives aimed at promoting transparency and accountability in environmental, social, and governance (ESG) matters.

  • Taxonomy Regulation: This regulation sets out a common language for sustainable activities, enabling investors to make informed decisions.
  • CSRD: This directive requires companies to report on their ESG performance, providing stakeholders with valuable insights into their sustainability credentials.
  • CBI’s commitment to sustainability: The Central Bank of Ireland (CBI) is committed to recognizing and promoting sustainability knowledge and competencies within the industry.

Diversity and Inclusion

Progress has been made in promoting diversity and inclusion in the Irish banking sector. Key developments include:

  • Increased female applicants for senior positions: Regulated firms have seen an increase in applications from women for senior roles, indicating a positive shift towards greater diversity.
  • Woman in Finance Charter progress reports: Regular updates on the charter’s progress provide insights into the industry’s efforts to promote gender equality.
  • Pay Transparency Directive at EU level: This directive aims to promote transparency in pay practices, ensuring that companies are held accountable for fair compensation.

Mortgage Rules and Consumer Protection

New mortgage rules have been introduced to enhance consumer protection. The CBI intends to:

  • Revise the Consumer Protection Code: This revised code will provide clearer guidelines on consumer rights and responsibilities.
  • Enhance consumer protection: Strengthened regulations aim to protect consumers from unfair practices in the mortgage market.

Client Asset Requirements

The Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Investment Firms) Regulations 2023 contain client asset requirements for banks carrying out MiFID investment business. These regulations ensure that banks maintain adequate controls to safeguard client assets.

Bank Governance and Internal Controls

Effective governance and internal controls are essential for ensuring the fitness and probity of banking institutions. Key aspects include:

  • Fitness and probity regime: This framework sets out the ongoing obligations, gatekeeper role, and investigative and enforcement powers necessary to maintain high standards within the industry.
  • Three pillars of ongoing obligations: Ongoing training, risk management, and regulatory compliance are essential components of a robust fitness and probity regime.