Financial Crime World

Ireland’s Financial Regulation Landscape: A Look at Walkers Ireland and the Legal Framework for Banking Business

Ireland’s dynamic financial sector is shaped by a robust regulatory framework designed to ensure stability and compliance. One of the key players in navigating this landscape is Walkers (Ireland) LLP*, a leading international law firm providing legal, corporate, fiduciary, and compliance services to global finance institutions.**

Overview of Walkers Ireland

  • Headquartered in Dublin
  • Experienced professionals advising on all aspects of financial regulation and data privacy
  • Key player in advising on the establishment of a new Irish bank under the EU Single Supervisory Mechanism (SSM)

Banking business in Ireland is governed by both domestic legislation and EU regulations.

Domestic Legislation

The Central Bank Acts 1942-2018, primarily the Central Bank Act 1971, serve as the foundation for Irish banking regulation. They:

  • Establish the Central Bank of Ireland (CBI) as the primary regulatory body
  • Require persons engaging in “banking business” to hold a banking licence

European Legislation

Ireland’s banking sector is subject to extensive regulatory requirements driven by EU legislation:

  • Capital Requirements Directive (CRD) and Capital Requirements Regulation (CRR) set prudential standards for banking institutions
  • SSM Regulation, through the ECB, oversees the supervision of banking institutions in participating EU member states
  • Exclusive competence for certain aspects of prudential supervision, including banking licences and acquisitions

Other Regulatory Bodies

Apart from the CBI, other regulatory bodies, such as:

  • Corporate Enforcement Authority
  • Competition and Consumer Protection Commission
  • Data Protection Commission
  • Financial Services and Pensions Ombudsman

play significant roles in the regulatory landscape.

Authorisation

To engage in banking business, individuals or entities must obtain a banking licence from the CBI or the European Central Bank (ECB):

  • Application process involves extensive assessment of an applicant’s business plan, organizational structure, financial strength, and compliance with regulatory requirements

Control

Foreign ownership and control of Irish banks are subject to limitations:

  • EU Screening Regulation
  • Irish Screening of Third Country Transactions Bill 2022 aim to introduce a screening regime for foreign investment transactions

Supervision

Supervision of Irish banks falls under the CBI and ECB:

  • CBI directly supervises less significant banks (LSIs)
  • ECB directly supervises significant banks (SIs) under the SSM

Ongoing Regulatory Requirements

  • Corporate governance obligations
  • Remuneration rules
  • Reporting obligations

Walkers Ireland’s team of financial regulatory experts can help entities navigate this complex regulatory environment and maintain compliance.