Financial sector set for 'remarkable' year - Central Bank deputy governor

Tuesday 15 April 2014 11.36
Cyril Roux said the introduction of the Single Supervisory Mechanism was a challenge but a positive step for Ireland
Cyril Roux said the introduction of the Single Supervisory Mechanism was a challenge but a positive step for Ireland

This year is set to be a “remarkable” one for financial institutions in Ireland as new rules and regulatory regimes are put into place, according to the Central Bank's deputy governor.

Addressing a Deloitte briefing on the future of prudential regulation, Cyril Roux said the implementation of the single supervisory mechanism in a demanding timeframe represented a “considerable challenge”.

However he said it was undoubtedly a positive step for Ireland, the euro zone and the European Union as a whole.

Its completion would also represent another step for Ireland in its attempts to restore confidence in the banking sector.

As part of his speech, Mr Roux outlined the steps set to be undertaken as the European Central Bank prepares to take over much of the regulation of banks in the region.

Amongst other things, he said this would see the ECB imposing penalties on larger banks found to be in breach of regulations – as opposed to the Irish authority.

However the Central Bank here would continue to have a role in enforcement, particularly amongst smaller firms and individuals.

The ECB will also have the final say in regards to the authorisation of new credit institutions, he said, though the Irish Central Bank will retain a role in the initial assessment of any application.

Five Irish institutions – AIB, Bank of Ireland, Permanent TSB, Ulster Bank and Merrill Lynch - are due to undergo a Comprehensive Assessment before the SSM is introduced in November.