Regulatory Role Evolves in Face of Innovation and Change
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In a rapidly changing financial landscape, the Central Bank of Ireland is adapting its regulatory role to ensure continued public trust and confidence. The bank’s representative emphasized the importance of gatekeeping and supervision in this new era.
Improving Authorizations Processes
The Central Bank has been working to improve authorizations processes, increasing engagement with firms while maintaining high standards. The representative stressed that this does not mean prioritizing speed over rigor, but rather using clear expectations to help firms meet the bank’s bar for authorization.
Key Takeaways:
- Increased engagement with firms
- Maintaining high standards
- Clear expectations for authorization
Supervision in a Changing Landscape
Supervision is also crucial, particularly for innovative and fast-growing firms. However, the bank has identified weaknesses in governance, risk management, and control frameworks among some Payment and E-Money institutions, leading to increased supervisory intensity.
Addressing Gaps:
- Engaging actively at a domestic and European level
- Identifying weaknesses in governance, risk management, and control frameworks
Regulation of Crypto Assets
The representative also touched on the regulation of crypto assets, highlighting the need for consumers to be aware that the new Markets in Crypto Assets Regulation (MICAR) will not provide the same level of protection as other retail financial services. While welcoming the introduction of MICAR, the bank emphasized the importance of accountability and transparency in any firm’s adoption framework.
Key Points:
- Consumers should be aware of the differences in protection between crypto assets and traditional financial services
- Accountability and transparency are essential for firms adopting crypto assets
Supervising AI and Maintaining Governance
In a rapidly changing world, regulation and compliance must evolve to meet the challenge. The Central Bank is committed to maintaining its core objectives while adapting to new technologies like AI.
Fundamentals of Supervision:
- Risk-based and proportionate approach
- Human oversight remaining key
The representative also highlighted the importance of good governance for a properly functioning financial system, emphasizing that effective governance underpinned by a strong culture and robust systems is becoming more essential in an increasingly technological world. The Individual Accountability Framework (IAF) is part of this effort to enhance governance, ensure clarity of responsibilities, and support the effective management of firms.
Conclusion:
The Central Bank’s commitment to delivering in the public interest remains unwavering as it navigates this complex and rapidly changing landscape.