New figures from the Central Bank show that total assets within Irish-resident Special Purpose Vehicles (SPEs) increased by €22.9 billion to €709.6 billion in the third quarter of this year.
A Special Purpose Entity (SPE) is a company specially created to fulfil a narrow, specific purpose.
They often have little or no physical presence, such as an office or full-time employees. They are also often part of complex chains of companies across a number of different countries.
The Cental Bank said the longer term trend of increasing diversity in business models is still apparent, though there are now signs of a recovery in bank-sponsored SPEs.
It also noted that new vehicles engaging in a wide range of activities are driving this longerterm
growth trend.
The Central Bank today also published research on the shadow banking sector in Ireland and the role of Special Purpose Entities (SPE) within that sector.
Shadow banking is a term used to describe bank-like activities - mainly lending - that take place outside the traditional banking sector.
Shadow bank lending has a similar function to traditional bank lending, but it is not regulated in the same way as traditional bank lending.
Many SPEs are seen as part of the shadow banking sector.
Today's Central Bank research shows that sponsoring entities behind SPEs are diverse, covering over 60 combinations of country and sector.
For securitisation SPEs, sponsors tend to be EU and US banks and other financial institutions.
Within non-securitisation SPEs non-financial corporations (NFCs) are also prominent.
The research also showed that the SPE industry paid €273m in fees and commissions to Irish entities last year.
But employment levels are very low given SPEs often have little or no physical presence.
"Within the balance of payments, the net impact is also limited as flows to and from SPEs are mostly between foreign entities," the Central Bank also noted.
Further Central Bank research also showed that shadow banking risks maturity and liquidity mismatches and interconnectedness.
"Shadow banking risks appear to be relatively contained, though more prominent for entities engaged in loan origination, bank-linked investment or external financing activity," it said.
"The complexity of international connections and information gaps therein are a more general cause for concern," the Central Bank added.
The bank said that a full understanding of the risks requires an end-to-end examination of the structure across jurisdictions.
"As such, the Central Bank is cooperating with national authorities in several jurisdictions on this issue," it added.
