## EXECUTIVE SUMMARY

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### Background and context
- Ireland experienced a historic banking crisis after a real estate bubble and credit boom; house prices almost doubled and total banking assets tripled from 2002 to 2008.
- The government recapitalized the banking system in the amount of €64 billion (about 40 percent of GDP).
- The Commission of Investigation (2011) found failings: systemic risk was misjudged by the IFSRA; the Central Bank of Ireland passively relied on the financial regulator; and the Department of Finance did not see itself as directly involved in financial stability issues.
- The 2010 institutional reorganization: the Central Bank Reform Act 2010 integrated the Central Bank of Ireland and IFSRA into a single board (Central Bank Commission); IFSRA ceased to exist; all financial policy functions were assigned to the Central Bank of Ireland.

### Institutional framework: roles, powers, and coordination
- Macroprudential policy for banking is a shared competency between the Central Bank of Ireland (National Competent Authority and National Designated Authority) and the European Central Bank (ECB) under the Single Supervisory Mechanism (SSM).
- Key features and procedures:
  - The ECB has "topping-up power" to apply higher requirements for capital buffers and more stringent measures than national authorities, but cannot set lower requirements than those set nationally.
  - Notification process: when a national authority intends a measure, the ECB should be notified ten working days in advance; the ECB can object within five working days stating reasons in writing.
  - For instruments outside CRR and CRD IV (e.g., LTV, LTI, DTI), the Central Bank of Ireland has full powers and responsibilities, while fully informing the ECB and the ESRB.
  - Coordination with EU bodies: ESRB issues "comply or explain" recommendations; coordination with EIOPA, EBA, and ESMA for non-banks and sectoral issues.
- Domestic coordination:
  - Strong internal coordination within the Central Bank of Ireland due to its unitary structure and two in-house advisory committees: Financial Stability Committee (FSC) and Supervisory Committee.
  - A "Principals Group" forum exists for discussion among the Central Bank of Ireland, Department of Finance (DOF), and National Treasury Management Agency.
  - The Central Bank seeks external views through consultation papers and roundtables.

### Systemic risk monitoring — assessment and data gaps
- The Central Bank of Ireland’s systemic vulnerability analysis is described as sophisticated and timely; the Financial Stability Division comprises 29 staff leading systemic risk analysis and macroprudential policy discussions.
- Regular outputs:
  - Biannual Macro-Financial Review (MFR) covering households, firms, government, banks, and non-bank financial institutions, with topical boxes.
  - Loan Loss Forecasting model for granular mortgage stress tests using loan-level data.
  - Household Credit Market Report detailing distribution of LTV ratios and mortgage arrears/modifications.
- Identified data gaps and monitoring shortfalls:
  - Bilateral liability positions of individual Irish banks are still not fully available.
  - Detailed information on transactions and construction activities in the CRE market is lacking.
  - Balance sheet data for non-financial corporations is incomplete.
  - Absence of a comprehensive credit register prevents connecting borrower credit information across financial institutions in Ireland.
  - The MFR could better cover financial interconnectedness among sectors and within each sector.
- Ongoing projects:
  - Project to develop tools and data collection for interconnections and structural systemic risk.
  - A CRE statistical system project (co-funded by the Central Bank of Ireland and NAMA) to give detailed information on sales, lease transactions, and construction activities; recommendation to include price information after the first stage.
  - Ongoing effort to collect loan-level data from commercial banks and to establish the Central Credit Register (CCR).

### Systemic vulnerabilities (selected findings)
- Legacy issues:
  - Large stock of non-performing loans (NPLs), including long-overdue mortgage arrears and CRE loans; resolution remains a challenge.
- Bank profitability and structure:
  - Low bank operating profits exacerbated by high private indebtedness, prevalence of variable rate loans, and a low interest rate environment.
  - Consolidation has increased the relative importance of each surviving bank and decreased diversification.
- Household and corporate vulnerabilities:
  - Vulnerable borrower segments include young borrowers and buy-to-let investors with high LTV and standard variable rates.
  - High indebtedness of some corporates: about one-fifth of domestic firms––mostly small size––were under “technical default” (with interest coverage ratio (ICR) of less than one) in 2013, with the share of debt owned by firms with ICR of less than one at 10 percent.
  - The share of risky debt among small firms constituted nearly half of small firms’ debt.
  - One-in-three Irish SMEs have no debt on their balance sheet (McCann, 2014), concentrating vulnerabilities among indebted SMEs.
- Sovereign and cross-border exposures:
  - Public debt-to-GDP ratio is declining, but remains high at 93.8 percent for end 2015.
  - Cross-border linkages: Irish domestic banks have large exposures to the U.K.; a severe U.K. shock would inflict large losses to Irish banks and corporates.
  - Insurance companies and pension funds could propagate negative foreign shocks into Ireland due to net foreign asset exposure.
- Inter-sectoral interconnectedness:
  - Banking sector is the linchpin of domestic financial networks.
  - Inter-bank linkages amounted to 41 percent of GDP.
  - OFI–NFC linkages mainly reflect intra-company transactions among multinationals; OFIs do not directly finance households to any significant degree.
- Real estate market dynamics:
  - Rapid rebound in Residential Real Estate (RRE) and Commercial Real Estate (CRE) prices; house price growth moderated to 6.6 percent (y-o-y) at end-2015, from 16 percent at end-2014.
  - Survey evidence: 2015Q3 RRE price expectation respondents expecting prices to rise across 1 quarter, 1 year, and 3 year horizons were 46, 82, 93 percent respectively, down from 90, 97, and 98 percent respectively in 2014Q3.
  - Non-parametric and parametric methods suggest RRE and CRE market prices are close to equilibrium, but rapid CRE price growth is an early signal of potential imbalances.

### Macroprudential instruments: deployment, calibration, and gaps
- Legal and institutional context:
  - Instruments under CRR and CRD IV include the countercyclical capital buffer (CCB); sectoral capital requirements; G-SII and O-SII buffers; pillar 2 requirements; leverage ratio; and national flexibility measures.
  - Liquidity measures: liquidity coverage ratio (LCR) and net stable funding ratio (NSFR).
  - National laws provide credit-based tools such as limits on LTV and LTI ratios under Section 48 of the Central Bank (Supervision and Enforcement) Act 2013.
- Recent actions and calibration:
  - February 2015: Central Bank of Ireland introduced limits on the proportion of mortgage loans at high LTV and LTI ratios by all regulated financial institutions.
  - LCR requirement: Banks obliged to maintain a minimum LCR of 60 percent from October 2015, to be phased in until 2018 with an increase of 10 percentage points per year.
  - Risk-weight adjustments: CRE loans risk-weighted at 100 percent; preferential 35 percent risk weight restricted to owner-occupied loans (principal dwelling houses) with LTV < 75 percent; 100 percent risk weight on other mortgage loans.
- Details on proportionate LTV/LTI limits (preserved exactly as in source):
  - For primary dwelling homes (PDHs): lower LTV limits (80 percent) apply to non-first time home buyers (FTBs).
  - For FTBs of PDHs: a 90 percent LTV limit applies to the first €220,000 of the value of the property, and a limit of 80 percent is imposed on the value of the property above this threshold.
  - The value of mortgage loans for PDHs above these limits should not exceed 15 percent of total PDH loans of a credit institution by the end of each year.
  - 70 percent LTV limit applied to new Buy-to-Let (BTL) mortgage loans, which should be exceeded by no more than 10 percent of the total value of BTL loans of a lender in a year.
  - Central Bank of Ireland imposes an LTI limit of 3.5 times gross annual income to new PDH mortgage loans, which should not be exceeded by 20 percent of total value of PDH loans of a lender in a year.
  - Exceptions: limits do not apply to switcher mortgages or loans for restructuring mortgage arrears; LTV limit does not apply to borrowers in negative equity purchasing a new home; LTI limit is not imposed on BTL loans.
- Additional measures:
  - December 2015: announced CCB and O-SII buffer.
    - CCB came into force in January 2016 and was set at zero percent.
    - A 1.5 percent O-SII buffer (in the form of CET1) will be phased in from July 2019 to July 2021 for two systemically important banks––the Governor and Company of the Bank of Ireland and Allied Irish Bank plc.
    - CCB assessments use guided discretion based on the credit-to-GDP gap and other indicators; CCB rate reviewed and announced quarterly.
    - O-SII identification assessed annually. No Irish bank currently categorized as a G-SII.
- Toolkit gaps and evolution:
  - Systemic risk buffer (SRB) under CRD IV has not been transposed into national law by DOF; government discretion to do so in future.
  - Leverage ratio: observation period until mid-2016; may become binding by 2018 following European review and calibration. Banks required to publicly disclose certain information on leverage ratio from 2015.
  - Recommendation to enrich the MFR with overall financial conditions and financial interlinkages; develop and include financial condition indicators in the MFR introductory section and periodically examine structural dimensions of systemic risks.

### Evidence on LTV/LTI measures and policy recommendations
- Rationale:
  - Household analysis supports proportionate limits on LTV and LTI ratios; LTI limits reduce probability of defaults and LTV limits bolster resilience to house price shocks.
  - Combining LTV and LTI measures is advisable and risky segments should be closely monitored.
- Empirical outcomes and guidance:
  - Some evidence the tools moderated housing pressures, especially via the expectation channel (survey and price growth moderation cited above).
  - Recommendations:
    - Maintain proportionate limits on LTV and LTI ratios and conduct rigorous impact analyses using new loan-level data to evaluate effectiveness and examine policy leakages (e.g., credit migrating to unsecured consumer loans).
    - Consider transforming proportionate LTI limits into caps on DTI ratio after successful CCR implementation. Rationale: DTI caps apply at individual household consolidated-debt level, while LTI limits are imposed on individual-loan basis and cannot prevent leakage such as use of unsecured loans to compensate for lower mortgage credit availability.
    - Continue collecting loan-level data and progress on CCR design to ensure accurate verification and consolidation of individual credit information.
    - Monitor potential leakage to unsecured lending and ensure consumer protection code and mortgage underwriting practices are enforced and closely monitored.

### Governance, transparency, and accountability — key points
- The Central Bank of Ireland has a clear financial stability mandate under the Central Bank Acts 1942 to 2014 and is accountable to the Houses of Oireachtas and broadly to the public.
- The Central Bank Commission is the highest decision-making body; the Commission published minutes of its December 2015 meeting in February 2016 (first time).
- Recommendation to publish a record (or summary) of the in-house Financial Stability Committee meetings periodically to strengthen legitimacy, accountability, and public support.
- Independence considerations:
  - The independence of the Central Bank of Ireland should be fully maintained; Central Bank Acts state: “nothing in the Central Bank Acts 1942 to 2010 affects the independence of the Central Bank of Ireland, the Governor, and the Commission required by the Rome Treaty and the ESCB Statute.”
  - Legal framework concerns relate to the Minister for Finance’s power to dismiss Commission members for broadly specified reasons, though no member has been removed under this section to date.

### Selected recommendations (with responsible authority and timing)
- Publish a record of meetings of the in-house Financial Stability Committee.
  - Responsible: Central Bank of Ireland
  - Time: I (Immediate)
- Improve surveillance by closing data gaps on granular bilateral exposure data within and across the banking sector and non-banking sectors, corporate sector balance sheets, and commercial real estate market activities.
  - Responsible: Central Bank of Ireland
  - Time: NT (Near-term)
- Make good progress to establish the Central Credit Register.
  - Responsible: Central Bank of Ireland
  - Time: NT (Near-term)
- Enrich the Macro-Financial Review with detailed discussion of financial interconnectedness and include indicators of overall financial conditions.
  - Responsible: Central Bank of Ireland
  - Time: NT (Near-term)
- Maintain, and in due course review, LTV and LTI limits.
  - Responsible: Central Bank of Ireland
  - Time: NT (Near-term)
- Transform limits on loan-to-income ratio into limits on debt-to-income ratio once the Central Credit Register is operational.
  - Responsible: Central Bank of Ireland
  - Time: MT (Medium-term)
- Work through ESRB, EBA, and EU Commission and Council to streamline the notification system at the European level to support timely macroprudential policy action while allowing adequate cross-border consideration.
  - Responsible: Central Bank of Ireland, DOF
  - Time: MT (Medium-term)
- Timing definitions:
  - "I-Immediate" is within six months.
  - "NT-near-term" is six months–2 years.
  - "MT-medium-term" is 2–5 years.

*Source: EXECUTIVE SUMMARY — Ireland Financial Sector Assessment Program (IMF technical note content provided).*

### EXECUTIVE SUMMARY ___________________________________________________________________________ 5

### EXECUTIVE SUMMARY

### Background and context
- Ireland experienced a historic banking crisis after a real estate bubble and credit boom; house prices almost doubled and total banking assets tripled from 2002 to 2008.
- The government recapitalized the banking system in the amount of €64 billion (about 40 percent of GDP).
- The Commission of Investigation (2011) found failings: systemic risk was misjudged by the IFSRA; the Central Bank of Ireland passively relied on the financial regulator; and the Department of Finance did not see itself as directly involved in financial stability issues.
- The 2010 institutional reorganization: the Central Bank Reform Act 2010 integrated the Central Bank of Ireland and IFSRA into a single board (Central Bank Commission); IFSRA ceased to exist; all financial policy functions were assigned to the Central Bank of Ireland.

### Institutional framework: roles, powers, and coordination
- Macroprudential policy for banking is a shared competency between the Central Bank of Ireland (National Competent Authority and National Designated Authority) and the European Central Bank (ECB) under the Single Supervisory Mechanism (SSM).
- Key features:
  - The ECB has "topping-up power" to apply higher requirements for capital buffers and more stringent measures than national authorities, but cannot set lower requirements than those set nationally.
  - Notification process: when a national authority intends a measure, the ECB should be notified ten working days in advance; the ECB can object within five working days stating reasons in writing.
  - For instruments outside CRR and CRD IV (e.g., LTV, LTI, DTI), the Central Bank of Ireland has full powers and responsibilities, while fully informing the ECB and the ESRB.
  - Coordination with EU bodies: European Systemic Risk Board (ESRB) issues "comply or explain" recommendations; coordination with EIOPA, EBA, and ESMA for non-banks and sectoral issues.
- Domestic coordination:
  - Strong internal coordination within the Central Bank of Ireland due to its unitary structure and two in-house advisory committees: Financial Stability Committee and Supervisory Committee.
  - A "Principals Group" forum exists for discussion among the Central Bank of Ireland, Department of Finance, and National Treasury Management Agency.
  - The Central Bank seeks external views through consultation papers.

### Assessment of systemic risk monitoring and data gaps
- The Central Bank of Ireland’s systemic vulnerability analysis is described as sophisticated and timely; it can request data from regulated entities and require information from unregulated entities under the Central Bank Acts.
- There is a dedicated Financial Stability Division leading systemic risk analysis and macroprudential policy discussions; the biannual Macro-Financial Review (MFR) covers sector stability and property markets.
- Identified data gaps and monitoring shortfalls:
  - Information on domestic and cross-border bilateral liability positions of banks and non-bank financial institutions is still incomplete in places.
  - Detailed information on important elements of commercial real estate market activities is lacking.
  - Balance sheet data for non-financial corporations is not fully available.
  - The absence of a comprehensive credit register precludes connecting credit information of borrowers across financial institutions in Ireland.
  - The MFR could better cover financial interconnectedness among sectors and within each sector.

### Macroprudential instruments and their early assessment
- The Central Bank of Ireland has introduced a range of macroprudential instruments to contain systemic risks, notably limits on loan-to-value (LTV) and loan-to-income (LTI) ratios on residential mortgages.
- Purpose and early effects:
  - Measures aim to strengthen household and financial sector resilience and reduce cyclical housing market dynamics.
  - There is some evidence these tools have moderated housing pressures, especially via the expectation channel.
- Policy guidance and further work:
  - Maintain proportionate limits on LTV and LTI ratios.
  - Because measures are new, more information is needed before refining calibration; rigorous impact analysis is warranted to evaluate effectiveness and examine possible policy leakages.
  - Consider transforming proportionate limits on the LTI ratio into caps on the DTI ratio once the Central Credit Register is successfully implemented.

### Recommendations (selected, with responsible authority and timing)
- Publish a record of meetings of the in-house Financial Stability Committee.
  - Responsible: Central Bank of Ireland
  - Time: I (Immediate)
- Improve surveillance by closing data gaps on granular bilateral exposure data within and across the banking sector and non-banking sectors, corporate sector balance sheets, and commercial real estate market activities.
  - Responsible: Central Bank of Ireland
  - Time: NT (Near-term)
- Make good progress to establish the Central Credit Register.
  - Responsible: Central Bank of Ireland
  - Time: NT (Near-term)
- Enrich the Macro-Financial Review with detailed discussion of financial interconnectedness and include indicators of overall financial conditions.
  - Responsible: Central Bank of Ireland
  - Time: NT (Near-term)
- Maintain, and in due course review, LTV and LTI limits.
  - Responsible: Central Bank of Ireland
  - Time: NT (Near-term)
- Transform limits on loan-to-income ratio into limits on debt-to-income ratio once the Central Credit Register is operational.
  - Responsible: Central Bank of Ireland
  - Time: MT (Medium-term)
- Work through ESRB, EBA, and EU Commission and Council to streamline the notification system at the European level to support timely macroprudential policy action while allowing adequate cross-border consideration.
  - Responsible: Central Bank of Ireland, DOF
  - Time: MT (Medium-term)

- Timing definitions (as used in recommendations):
  - "I-Immediate" is within six months.
  - "NT-near-term" is six months–2 years.
  - "MT-medium-term" is 2–5 years.

### Governance, transparency, and accountability
- The Central Bank of Ireland has a clear financial stability mandate under the Central Bank Acts 1942 to 2014 and is accountable to the Houses of Oireachtas and broadly to the public.
- Central bank communication has evolved; minutes of its meeting were published for the first time (minutes from December 2015 published in February 2016).
- To preserve independence and public support, publish a record (or summary) of the in-house Financial Stability Committee meetings to strengthen legitimacy, accountability, and support.

*Source: EXECUTIVE SUMMARY — Ireland Financial Sector Assessment Program (IMF technical note content provided).*

### 9.      The following sections review the current institutional arrangement in Ireland, which

### 9.      The following sections review the current institutional arrangement in Ireland, which

### A.   Principle 1: Willingness to Act

- The review evaluates the arrangement according to three key principles: (i) willingness to act in the face of potential opposition, thereby countering inaction bias; (ii) ability to act, through access to data, resources and regulatory powers; and (iii) cooperation across all agencies in both domestic and cross-border dimensions.
- The Central Bank of Ireland published the macroprudential policy framework in 2014 (Central Bank of Ireland, 2014).
- The Central Bank of Ireland has a clear financial stability mandate under the Central Bank Act. Other than those related to monetary policy functions, the Central Bank of Ireland has the following objectives:
  - (i) stability of the financial system overall;
  - (ii) proper and effective regulation of financial service providers and markets, while ensuring that the best interests of consumers of financial services are protected;
  - (iii) the efficient and effective operation of payment and settlement systems;
  - (iv) the provision of analysis and comment to support national economic policy development;
  - (v) the resolution of financial difficulties in credit institutions.
- Under the Central Bank Acts, the Central Bank of Ireland no longer has statutory responsibility for promoting the development of the financial services industry. The role of providing consumer education and information has been transferred to the national consumer agency.
- The Central Bank Commission is the highest decision making body in the Central Bank of Ireland. It is chaired by the Governor and consists of the Deputy Governor of Central Banking, the Deputy Governor of Financial Regulation, the Secretary General of the Department of Finance, and at least six members (no more than eight) appointed by the Minister for Finance.
- The functions and powers of the Central Bank of Ireland as the NDA for the purposes of the CRD IV and the CRR have been delegated to the Governor, with the power for the Governor to further delegate these statutory functions and powers. The designated authority powers include the powers over the capital buffers (Articles 128–140 CRD IV and Article 458 CRR).
- The Commission retains its decision power regarding macroprudential instruments under national laws (e.g., limits on LTV and LTI ratios).
- To support the Governor and the Commission in macroprudential policy discussions, there is a dedicated division (Financial Stability Division) and an advisory committee (the Financial Stability Committee (FSC)).
- Accountability mechanisms:
  - The Central Bank of Ireland is accountable to the Houses of Oireachtas and, in a broad sense, to the general public through an annual report to the Minister for Finance and an annual performance statement that must contain:
    - (i) details of regulatory activities planned for the current year; and
    - (ii) a review of regulatory performance during the preceding year regarding the regulatory performance plan for that year, and other relevant matters.
  - The Central Bank Acts require a periodic “internal peer review of regulatory performance” to be carried out at least every four years.
  - The Governor or relevant senior staff can be asked to appear before a committee of the Oireachtas to provide information related to the performance statement.
- Central Bank communication developments:
  - For the first time the Commission published minutes of its meeting of December 2015 in February 2016.
  - Clear and rich communication is important to promote public understanding, counter inaction bias, and enhance legitimacy and accountability of macroprudential policy.
  - It would be useful if minutes provide detailed information of the meetings, though it is too early to evaluate the content.

### B.   Principle 2: Ability to Act

- The new framework includes provisions to adapt to the potentially evolving nature of systemic risk.
- Data and information powers:
  - The Central Bank of Ireland has the power to request data directly from regulated entities.
  - The Central Bank of Ireland has powers to require information from unregulated entities under the Central Bank (Supervision and Enforcement) Act 2013 where this information is necessary for the performance by the Central Bank of Ireland of its functions under financial services legislation relating to the proper and effective regulation of financial service providers.
  - Section 18 of the Central Bank Act 1971 provides the Central Bank of Ireland with the power to require information from credit institutions and certain categories of unregulated entities.
  - These powers were applied to the non-bank financial sector in 2015 when reporting requirements were extended to include special purpose vehicles (SPVs).
  - These powers are important given the large size of the non-banking sectors, enabling assessment of activities in non-banking sectors and linkages with the banking sector.
- Regulatory instrument powers:
  - The Central Bank of Ireland has powers to change the levels and regulatory perimeter of macroprudential instruments under national law, such as the LTV and LTI limits.
  - It was communicated at the time of introduction that it may be necessary to adjust parameters of the tools in response to economic, market, or other developments. Adjustment would involve a consultation with the Minister for Finance, as occurred with the original introduction of the limits.

### C.   Principle 3: Effective Coordination and Cooperation

- Integrated arrangement strengths:
  - The unitary structure fosters strong coordination of micro- and macroprudential policy within the Central Bank of Ireland.
  - For checks and balances, there are two in-house “advisory” committees: the FSC and the Supervisory Risk Committee.
  - There is a “Principals Group” forum for discussion and coordination among Irish agencies (Central Bank of Ireland, DOF, and National Treasury Management Agency).
- Mitigating group-thinking:
  - The FSC, chaired by the Governor, has representation from both macro- and microprudential policy areas and advises the Governor on issues central to the mandate to contribute to financial stability in Ireland and the Euro area.
  - The FSC meets approximately 15 times a year.
  - Staff reports are subject to challenge by FSC members.
  - Six external members in the Central Bank Commission bring a different range of knowledge and insights.
  - The Minister may request the Governor or the Commission to consult with the Minister in relation to the Central Bank’s policy functions (other than what is imposed by the Rome Treaty or the ESCB Statute).
- External engagement:
  - The Central Bank of Ireland seeks views through consultation papers and organizes roundtables:
    - Roundtables with industry on financial stability issues take place on an annual basis; examples include convening on real estate issues in 2014 and 2015.
    - These roundtables provide market intelligence about risks in residential and commercial property markets.
    - The Central Bank organizes a bi-annual “Economics Roundtable,” mainly attended by academics and financial sector representatives. A recent roundtable dealt with mortgage arrears.
- Cross-border coordination:
  - Cross-border cooperation, including with non-SSM countries, is important and should be efficient.
  - The introduction of the SSM implies that the ECB has the power to apply more stringent measures than those applied by the NDA or NCA of participating Member States (“topping-up power”).
  - The ESRB, established in 2010, acts as the macroprudential oversight body in the EU and issues recommendations on a “comply or explain” basis covering all segments in the financial systems of EU member countries.
  - Coordination at the European level involves extensive notifications and consultation requirements on the use of macroprudential tools, with requirements varying across instruments.
  - A challenge will be handling efficiently and effectively all notifications sent and received; it remains to be seen how efficiently this system will work in practice.
  - The implementation process of Article 458 (flexibility measures) is particularly onerous; it can take 2–3 months under the CRR from the time of notification of the national authorities to the adoption of the draft national measure.

### D.   Recommendations

- Maintain independence:
  - The independence of the Central Bank of Ireland should be fully maintained to avoid delayed actions.
  - The Central Bank Acts state: “nothing in the Central Bank Acts 1942 to 2010 affects the independence of the Central Bank of Ireland, the Governor, and the Commission required by the Rome Treaty and the ESCB Statute.”
  - The Central Bank of Ireland’s imposition of limits on LTV and LTI ratios provides evidence of how this independence can operate in practice; the Central Bank of Ireland did not change its decision despite financial industry and political pressure.
  - While there is no observed political interference, the legal framework is not fully satisfactory regarding the ability of the Minister for Finance to dismiss members of the Commission for specified reasons which are broad in nature and interpretation. It is noted that no member has been removed under this section to date.
- Increase transparency of advisory body:
  - The Central Bank of Ireland should consider publishing a record (or a summary) of the meetings of the in-house Financial Stability Committee periodically to strengthen legitimacy and accountability and promote public support.
  - Most decision-making powers related to macroprudential tools (except limits on LTV and LTI ratios) are delegated to the Governor, and the FSC plays a major role in advising the Governor.
- Streamline notification system:
  - A more streamlined notification system could more efficiently support timely macroprudential policy action while still allowing adequate consideration of cross-border issues.
  - National authorities currently need to work through the membership of the EU Council, the EU Commission, the ESRB, and the EBA.
  - The system established seems lengthy, complex, and quite rigid.
  - For example, the implementation process of Article 458 can take 2–3 months under the CRR from notification to adoption of the draft national measure.
  - Considering the possibility of urgent need, authorities should be able to make their case for accelerating the approval process, perhaps on condition that the relevant measure be subject to early review.

### SYSTEMIC RISK MONITORING

### A.   Assessment

- Overall assessment:
  - While the Irish financial system is recovering from the crisis, there are still some pockets of vulnerabilities that deserve close monitoring.
- Identified vulnerabilities include:
  - Legacy issues:
    - Dealing with the stock of non-performing loans (NPLs) remains a challenge despite a series of policy measures.
    - Authorities have deployed measures to accelerate resolution of problem loans, especially mortgages, commercial real estate (CRE) loans, and loans to small and medium-sized enterprises.
    - The system still holds a large stock of NPLs, composed to a significant degree of long-overdue mortgage arrears and CRE loans.
  - Low bank operating profits:
    - High private indebtedness and prevalence of variable rate loans imply that an economic slowdown—or higher lending rates—could lead to more provisioning and write-offs.
    - Consolidation in the domestic banking sector has increased the relative importance of each surviving bank and decreased diversification.
    - Bank profitability has been squeezed, mainly because of a decline in earnings under the low interest rate environment.
  - Presence of vulnerable households:
    - Segments identified using aggregate and loan-level data.
    - Existing borrowers with high LTV ratios (e.g., young borrowers and buy-to-let investors) and standard variable rates are relatively more vulnerable to adverse shocks.
  - High indebtedness of some corporates:
    - The level of non-financial corporate (NFC) debt and corporate NPLs remains high, limiting firms’ ability, particularly SMEs’, to access finance and undertake new investment.
    - About one-fifth of domestic firms––mostly small size––were under “technical default” (with interest coverage ratio (ICR) of less than one) in 2013, with the share of debt owned by firms with ICR of less than one at 10 percent.
    - The share of risky debt among small firms constituted nearly half of small firms’ debt.
    - One-in-three Irish SMEs have no debt on their balance sheet (McCann, 2014), therefore vulnerabilities are concentrated amongst a group of indebted SMEs.
  - High sovereign indebtedness:
    - Public debt-to-GDP ratio is declining, but remains high at 93.8 percent for end 2015.
  - Cross-border interconnectedness:
    - Cross-border financial linkages appear weaker than in the pre-crisis period, but Irish domestic banks have large exposures to the U.K. relative to the size of their balance sheets.
    - A severe financial distress in the U.K. economy would inflict large losses to the Irish banks and affect Irish corporates, employment, and domestic banks.
    - Insurance companies and pension funds could propagate negative foreign shocks into Ireland because domestic households are exposed to non-residents through their savings in these sectors, which invest in foreign assets in net terms.
    - The government and NFCs, mainly multinational companies, rely on funding from non-residents and remain vulnerable to a reversal of sentiment in the global financial market.
    - Central Bank of Ireland (2015a) notes the impact of a Brexit on the Irish financial sector could be significant if it occurred in a disorderly manner and/or had a large negative impact on the U.K. economy.
  - Inter-sectoral interconnectedness:
    - The banking sector is the linchpin in the network of domestic financial sectors.
    - The largest bilateral connections run between the banking and real sectors (households, NFCs, and governments).
    - Inter-bank linkages amounted to 41 percent of GDP.
    - Other financial intermediaries (OFIs) are linked to real sectors, but OFI–NFC linkages mainly reflect intra-company transactions between multinational companies and their treasury companies; OFIs do not directly finance households to any significant degree, but are largely connected through purchase of securitizations and sales of mortgage loans.
    - Irish-domiciled money market funds have no meaningful link with other domestic sectors.
  - Rapid rebound of CRE and RRE market prices:
    - Residential real estate (RRE) and CRE prices in Ireland have been rising rapidly in recent years, raising concerns about possible overvaluation and build-up of new imbalances.
    - The rebound in the Irish RRE and CRE market has been more vigorous than in other OECD countries.
    - Both non-parametric and parametric methods suggest that the RRE and CRE market prices are close to their equilibrium level, but rapid price growth in the CRE market can be an early signal of new imbalances and thus should not be overlooked.

*Source: IMF staff assessment as presented in the provided content unit.*

### 24. The Central Bank of Ireland’s analysis of systemic vulnerabilities is sophisticated and

### _cr16316 - 24. The Central Bank of Ireland’s analysis of systemic vulnerabilities is sophisticated and

### Systemic risk analysis — institutional setup and outputs
- Financial Stability Division: 29 staff leading systemic risk analysis and macroprudential policy discussions.
- Publications and regular outputs:
  - Biannual Macro-Financial Review (MFR) covering stability of households, firms, government, banks, and non-bank financial institutions, including boxes on topics such as a U.K. exit from the EU, economy-wide vulnerabilities from credit growth, and an introduction to the countercyclical capital buffer and O-SII buffer.
  - Loan Loss Forecasting model for granular mortgage stress tests using loan-level data (Gaffney, Kelly, Lyons, and McCann, 2014).
  - Household Credit Market Report using a wide range of data sources, detailing distribution of LTV ratio of mortgage loans and mortgage arrears/modifications (Central Bank of Ireland, 2015b).
- Research on interconnectedness: publications on banking sector interconnectedness and Irish network of CDS counterparties (Hallissey, 2016; Kenny, Killeen, and Moloney, 2015). Hallissey (2016) finds the interbank credit network in Ireland is relatively sparse with just a few key hubs, the most connected of which were on the list of global systemically important financial institutions.

### Data gaps and analytical limitations
- Identified data gaps:
  - Bilateral liability positions of individual Irish banks are still not fully available.
  - Detailed information on transactions and construction activities in the CRE market is lacking.
  - Balance sheet data for non-financial corporations is incomplete.
  - Absence of a comprehensive credit register prevents connecting borrower credit information across financial institutions in Ireland.
  - The MFR does not cover financial interconnectedness among sectors as well as within each sector.
- Consequence: further improvements in data collection and processing capacity are necessary to enhance systemic risk monitoring.

### Ongoing projects to enhance structural systemic risk monitoring
- Project underway to develop tools and data collection for assessing interconnections and the structural dimension of systemic risk.
- A CRE statistical system project, co-funded by the Central Bank of Ireland and National Asset Management Agency (NAMA), will give detailed information on sales and lease transactions, and construction activities such as permissions, commencements, and completions. Recommendation: after the first stage, include price information as part of the database.
- Ongoing effort to collect loan-level data from commercial banks and to establish the Central Credit Register (CCR); loan-level data essential to evaluate impacts of LTV and LTI limits and to accurately verify and consolidate individual credit information.

### Recommendations on data and cross-border cooperation
- Continue collecting granular bilateral exposure data within banking and non-bank sectors, and across these sectors; ensure institution-wide collaboration and allocate sufficient resources to process large new data volumes.
- Work with other European countries and agencies to close data gaps on cross-border bilateral financial exposures; the lack of bilateral exposure data is common across European countries collecting COREP and FINREP.
- Continue close monitoring of U.K. exposures of Irish banks given tight linkages with the U.K. financial system; development of stress-testing loan-loss forecasting models is welcome.
- Enhance CRE market and corporate sector analyses; expand corporate vulnerability assessment with extensive coverage of firm-level data.

### Macroprudential instruments — legal and institutional context
- Instruments under CRR and CRD IV (transposed by the European Union (Capital Requirements) Regulations 2014 (Statutory Instruments No. 158 of 2014)) include:
  - countercyclical capital buffer (CCB);
  - sectoral capital requirements (e.g., risk weights, minimum loss given default (LGD) floors);
  - specific buffers for global systemically important institutions (G-SII) and other systemically important institutions (O-SII);
  - pillar 2 requirements;
  - leverage ratio;
  - national flexibility measures.
- Liquidity measures in CRR: liquidity coverage ratio (LCR) and net stable funding ratio (NSFR) subject to observation and phase-in period.
- National laws provide credit-based tools such as limits on LTV and LTI ratios (Grace, Hallissey, and Woods, 2015).

### Recent macroprudential actions and calibration
- February 2015: Central Bank of Ireland introduced limits on the proportion of mortgage loans at high LTV and LTI ratios by all regulated financial institutions to enhance resilience to aggregate shocks (Central Bank of Ireland, 2015c; Kelly, O’Malley, and O’Toole, 2015).
- LCR requirement: Banks obliged to maintain a minimum LCR of 60 percent from October 2015, to be phased in until 2018 with an increase of 10 percentage points per year.
- Risk-weight adjustments:
  - Risk weights on CRE loans set at 100 percent (stricter than CRR standardized approach).
  - Preferential risk weight 35 percent restricted to owner-occupied loans (principal dwelling houses) with LTV < 75 percent.
  - 100 percent risk weight imposed on other mortgage loans.
- Details on proportionate LTV/LTI limits (examples preserved exactly as in source):
  - For primary dwelling homes (PDHs): lower LTV limits (80 percent) apply to non-first time home buyers (FTBs).
  - For FTBs of PDHs: a 90 percent LTV limit applies to the first €220,000 of the value of the property, and a limit of 80 percent is imposed on the value of the property above this threshold.
  - The value of mortgage loans for PDHs above these limits should not exceed 15 percent of total PDH loans of a credit institution by the end of each year.
  - 70 percent LTV limit applied to new Buy-to-Let (BTL) mortgage loans, which should be exceeded by no more than 10 percent of the total value of BTL loans of a lender in a year.
  - Central Bank of Ireland imposes an LTI limit of 3.5 times gross annual income to new PDH mortgage loans, which should not be exceeded by 20 percent of total value of PDH loans of a lender in a year.
  - Exceptions: limits do not apply to switcher mortgages or loans for restructuring mortgage arrears; LTV limit does not apply to borrowers in negative equity purchasing a new home; LTI limit is not imposed on BTL loans.
- December 2015: announced CCB and O-SII buffer.
  - CCB came into force in January 2016 and was set at zero percent.
  - A 1.5 percent O-SII buffer (in the form of CET1) will be phased in from July 2019 to July 2021 for two systemically important banks––the Governor and Company of the Bank of Ireland and Allied Irish Bank plc.
  - CCB assessments use guided discretion based on the credit-to-GDP gap and other indicators; CCB rate reviewed and announced quarterly.
  - O-SII identification assessed annually. No Irish bank currently categorized as a G-SII.

### Macroprudential toolkit gaps and evolution
- SRB (systemic risk buffer) allowed under CRD IV has not been transposed into national law by DoF; government discretion to do so in future.
- Leverage ratio: observation period until mid-2016; may become binding by 2018 following European review and calibration. Banks required to publicly disclose certain information on leverage ratio from 2015.
- MFR coverage: recommendation to include overall financial conditions and financial interlinkages in Ireland; develop and include financial condition indicators in the MFR introductory section and periodically examine structural dimensions of systemic risks.

### Evidence on LTV/LTI measures and policy recommendations
- Rationale: Household analysis supports proportionate limits on LTV and LTI ratios; LTI limits reduce probability of defaults and LTV limits bolster resilience to house price shocks. Combining measures is advisable and risky segments should be closely monitored.
- Empirical signals and outcomes:
  - Evidence of moderation in house price expectations after measures: 2015Q3 survey of RRE price expectations showed respondents expecting prices to rise across 1 quarter, 1 year, and 3 year horizons were 46, 82, 93 percent respectively, down from 90, 97, and 98 percent respectively in 2014Q3 (Central Bank of Ireland, 2015a).
  - House price growth rate moderated to 6.6 percent (y-o-y) at end-2015, from 16 percent at end-2014.
- Recommendations:
  - Maintain proportionate limits on LTV and LTI ratios and conduct rigorous impact analyses using new loan-level data to evaluate effectiveness and examine policy leakages (e.g., credit migrating to unsecured consumer loans).
  - Consider transforming proportionate LTI limits into caps on DTI ratio after successful CCR implementation. Rationale: DTI caps apply at individual household consolidated-debt level, while LTI limits are imposed on individual-loan basis and cannot prevent leakage such as use of unsecured loans to compensate for lower mortgage credit availability.
  - Continue collecting loan-level data and progress on CCR design to ensure accurate verification and consolidation of individual credit information.
  - Monitor potential leakage to unsecured lending and ensure consumer protection code and mortgage underwriting practices are enforced and closely monitored.

*Source: IMF staff assessment and recommendations as presented in the referenced IMF document.*

### References

### References

### Key cited works (selected)
- Ahuja, Ashvin and Malhar Nabar, 2011, “Safeguarding Banks and Containing Property Booms: Cross-Country Evidence on Macroprudential Policies and Lessons from Hong Kong SAR,” IMF Working Paper, WP/11/284 (Washington: International Monetary Fund).
- Central Bank of Ireland, 2015a, “Macro-Financial Review,” Volume II (Dublin: Central Bank of Ireland).
- Central Bank of Ireland, 2015b, “Household Credit Market Report,” Volume II (Dublin: Central Bank of Ireland).
- Central Bank of Ireland, 2015c, “Information Note: Restrictions on Residential Mortgage Lending,” January (Dublin: Central Bank of Ireland).
- Central Bank of Ireland, 2014, “A Macroprudential Policy Framework for Ireland,” (Dublin: Central Bank of Ireland).
- Coates, Dermot, Reamonn Lydon, and Yvonne McCarthy, 2015, “House Price Volatility: The role of different buyer types,” Economic Letters, Vol. 2015, No. 2 (Dublin: Central Bank of Ireland).
- Commission of Investigation, 2011, “Misjudging Risk: Causes of the Systemic Banking Crisis in Ireland,” Report of the Commission of Investigation into the Banking Sector in Ireland, March.
- Crowe, Christopher, Giovanni Dell’Ariccia, Deniz Igan, and Pau Rabanal, 2013, “How to Deal with Real Estate Booms: Lessons from Country Experiences,” Journal of Financial Stability, No. 9, pp. 300–319.
- Drehmann, Mathias and Mikael Juselius, 2012, “Do Debt Service Costs Affect Macroeconomic and Financial Stability?” BIS Quarterly Review (September) (Basel: Bank for International Settlements).
- Duca, John V., John Muellbauer, and Anthony Murphy, 2011, “House Prices and Credit Constraints: Making Sense of the U.S. Experience,” The Economic Journal, Vol. 121, pp. 533–551.
- European Systemic Risk Board, 2014, “ESRB Recommendation on the macro-prudential mandate of national authorities: Follow-up Report – Overall assessment,” June (Frankfurt am Main: European Systemic Risk Board).
- Financial Services Authority, 2009, “Mortgage Market Review,” Discussion Paper, No. 09/3 (London: Financial Services Authority).
- Gaffney, Edward, Robert Kelly, Paul Lyons, and Fergal McCann, 2014, "Loan Loss Forecasting: A Methodological Overview," Economic Letters, Vol. 2014, No. 13 (Dublin: Central Bank of Ireland).
- Gaffney, Edward, Robert Kelly, and Fergal McCann, 2014, "A transitions-based framework for estimating expected credit losses," Research Technical Papers 16/RT/14 (Dublin: Central Bank of Ireland).
- Grace, Therese, Niamh Hallissey, and Maria Woods, 2015, “The Instruments of macro-prudential policy”, Quarterly Bulletin 01, January (Dublin: Central Bank of Ireland).
- Hallissey, Niamh 2016, “Interconnectedness of the Irish banking sector with the global financial system,” Quarterly bulletin, spring (Dublin: Central Bank of Ireland).
- Hallissey, Niamh, Robert Kelly, and Terence O’Malley, 2014, “Macroprudential Tools and Credit Risk of Property Lending at Irish banks”, Economic Letter, Vol. 2014. No. 10 (Dublin: Central Bank of Ireland).
- Igan, Deniz and Heedon Kang, 2011, “Do Loan-to-Value and Debt-to-Income Limits Work? Evidence from Korea,” IMF Working Paper, WP/11/297 (Washington: International Monetary Fund).
- IMF, 2015, “A Strategy for Resolving Europe’s Problem Loans,” IMF SDN/15/19 (Washington D.C.: International Monetary Fund).
- IMF, 2014a, “Staff Guidance Note on Macroprudential Policy,” December (Washington D.C.: International Monetary Fund).
- IMF, 2014b, “Staff Guidance Note on Macroprudential Policy: Detailed Guidance on Instruments,” December (Washington D.C.: International Monetary Fund).
- IMF, 2013, “Key Aspects of Macroprudential Policies,” IMF Policy Paper (Washington D.C.: International Monetary Fund).
- IMF, 2011, “Housing Finance and Financial Stability—Bank to Basics?” Global Financial Stability Report, April, Chapter 3 (Washington: International Monetary Fund).
- Kelly, Robert, Terry O’Malley, and Conor O’Toole, 2015, “Designing Macroprudential Policy in Mortgage Lending: Do First Time Buyers Default Less?” Research Technical Paper 02/RT/15 (Dublin: Central Bank of Ireland).
- Kenny, Oisin, Neill Killeen, and Kitty Moloney, 2015, “Network Analysis using EMIR Credit Default Swap Data: Micro-level evidence from Irish domiciled special purpose vehicles (SPVs),” BIS conference volume (Basel: Bank for International Settlements).
- Krznar, Ivo and James Morsink, 2014, “With Great Power Comes Great Responsibility: Macroprudential Tools at Work in Canada,” IMF Working Paper, WP/14/83 (Washington: International Monetary Fund).
- Kuttner, Kenneth N. and Ilhyock Shim, 2013, “Can Non-interest Rate Policies Stabilise Housing Markets? Evidence from a Panel of 57 Economies,” BIS Working Papers, No. 433 (Basel: Bank for International Settlements).
- Lee, Jong Kyu, 2012, “The Operation of Macroprudential Policy Measures: The Case of Korea,” mimeo (Seoul: Bank of Korea).
- Lim, Cheng Hoon et al., 2011, “Macroprudential Policy: What Instruments and How Are They Used? Lessons from Country Experiences,” IMF Working Paper, WP/11/238 (Washington: International Monetary Fund).
- Lydon, Reamonn and Yvonne McCarthy, 2013, “What Lies Beneath? Understanding Recent Trends in Irish Mortgage Arrears,” The Economic and Social Review, Vol. 44, No. 1, Spring, 2013, pp. 117–150.
- McCann, Fergal, 2014, “Profiling the Indebtedness of Irish SMEs,” Economic Letters (Dublin: Central Bank of Ireland).
- O’Brien, Eoin, and Maria Woods, forthcoming, “Estimating misalignment in Irish commercial property prices,” mimeo (Dublin: Central Bank of Ireland).
- Reserve Bank of New Zealand, 2014, “C30 New Residential Mortgage Lending: Loan-to-Valuation Ratio (LVR),” Statistics (Wellington: Reserve Bank of New Zealand).
- Wong, Eric, Tom Fong, Ka-fai Li and Henry Choi, 2011, “Loan-to-Value Ratio as a Macroprudential Tools—Hong-Kong’s Experience and Cross-Country Evidence,” HKMA Working Paper, No. 01/2011 (Hong Kong: Hong Kong Monetary Authority).

### Appendix I — Functions and powers of the ECB and the ESRB on macroprudential policy
- Mandates and remits:
  - ECB’s macroprudential mandate covers the banking sector in countries that participate in the SSM.
  - ESRB’s remit comprises the financial system as a whole, including the non-banking sector, and for the entire EU.
- Powers:
  - ECB has hard (“topping-up”) powers over instruments set out in the CRD IV and CRR; ESRB has powers of recommendation only.
- Shared competency in SSM countries:
  - SSM Regulation confers to the ECB specific powers over macroprudential instruments set out in the CRD IV and CRR (examples include the countercyclical capital buffer).
  - For those measures the ECB must be notified in advance and can apply higher requirements and more stringent measures than national authorities (“topping-up” powers).
  - The ECB can relax the higher requirement it sets but cannot set lower requirements than those set nationally.
  - For instruments outside the CRR and CRD IV (e.g., limits to LTV, LTI or debt service-to-income ratios) the ECB can suggest national authorities use their powers and national authorities are obliged to fully inform the ECB about the exercise of those powers.
- Internal governance:
  - Governing Council is the ultimate decision-maker.
  - Council decides based on a proposal by the Supervisory Board, which takes into account input from the Financial Stability Committee and the Macroprudential Coordination group.
  - Financial Stability Committee brings together high-level representatives of national authorities to establish common ground across SSM Member States.
- ESRB role and tools:
  - ESRB identifies and monitors systemic risks in the EU financial system but has no direct powers to impose specific measures.
  - ESRB can issue non-binding warnings and recommendations on a “comply or explain” basis to the EU as a whole; one or more Member States; and one or more European or national supervisory agencies, including the ECB in its supervisory role.
  - CRR and CRD IV provide additional roles for the ESRB, including issuing “opinions” on specific measures notified under Art 458 CRR, which ultimately require approval by the European Council.
- Cooperation:
  - ECB cooperates closely with the ESRB, coordinating macroprudential agenda and work plans.
  - Coordination aims to ensure spillovers across sectors and between SSM and non-SSM countries are considered.
  - ECB provides analytical, statistical, logistical and administrative support to the ESRB Secretariat.

### Appendix II — Ireland: Macroprudential instruments (selected entries from table)
- Macroprudential tools under CRR and CRD IV:
  - Countercyclical capital buffer
    - Legal basis: Regulation 125-128 of S.I. 158 of 2014
    - Agency in charge of implementation: Central Bank of Ireland, ECB
    - Usage Availability Implemented: Jan. 2016 / Jan. 2016
    - Reciprocity: Mandatory
    - Perimeter: All banks and some investment firms
    - Notification Requirements: - / O / -
  - G-SII buffer
    - Legal basis: Regulation 123 of S.I. 158 of 2014
    - Agency: Central Bank of Ireland, ECB
    - Usage Availability Implemented: Jan. 2016 / N/A
    - Perimeter: No Irish institutions
    - Notification/Reciprocity: O / O / O / O
  - O-SII buffer
    - Legal basis: Regulation 123 of S.I. 158 of 2014
    - Agency: Central Bank of Ireland, ECB
    - Usage Availability Implemented: Jan. 2016 / July 2019
    - Perimeter: The Governor and the Company of the Bank of Ireland, Allied Irish Bank plc
    - Notification/Reciprocity: O / O / O
  - Systemic risk buffer
    - Legal basis: Regulation 124 of S.I. 158 of 2014
    - Agency: Central Bank of Ireland, DOF, ECB
    - Usage Availability Implemented: - / - / The Central Bank of Ireland has the power to reciprocate / To be determined
    - Notification/Reciprocity/Perimeter: O / O / O
  - Risk weight for RRE and CRE exposures
    - Legal basis: Article 124.2 of the CRR
    - Agency: Central Bank of Ireland, ECB
    - Usage Availability Implemented: 2007 / 2007 / Mandatory
    - Perimeter: All banks and some investment firms
    - Notification Requirements: - / - / O
  - Loss given default for RRE and CRE exposures
    - Legal basis: Article 164.5 of the CRR
    - Agency: Central Bank of Ireland, ECB
    - Usage Availability Implemented: Jan. 2014 / Jan. 2014 / Mandatory
    - Perimeter: All banks and some investment firms
    - Notification Requirements: - / - / O
  - Flexibility measures (Article 458 of the CRR)
    - Agency: Central Bank of Ireland, ECB
    - Usage Availability Implemented: Jan. 2014 / -
    - Can be requested
    - Perimeter: All banks and some investment firms
    - Notification Requirements: O / O / O
  - Pillar II
    - Legal basis: Regulation 90-95 of S.I. 158 of 2014
    - Agency: Central Bank of Ireland, ECB
    - Usage Availability Implemented: Jan. 2014 / -
    - Perimeter: All banks and some investment firms
    - Notification Requirements: - / - / O
- Macroprudential tools under national law:
  - Limits on LTV and LTI ratios
    - Legal basis: Section 48 of the Central Bank (Supervision and Enforcement) Act 2013
    - Agency: Central Bank of Ireland
    - Usage Availability Implemented: 2013 / Feb. / 2015
    - Perimeter: All financial institutions
    - Notification/Reciprocity: - / - / -
  - Asset to liability ratio (LDR targets)
    - Legal basis: Section 23/23A of the Central Bank Act 1971
    - Agency: Central Bank of Ireland
    - Usage Availability Implemented: 1971/1989 / -
    - Perimeter: All banks and some investment firms
    - Notification/Reciprocity: - / - / -
- Notes from the table:
  - The list of possible measures under flexibility measures includes the level of own funds, large exposure limits, public disclosure requirements, the level of the capital conservation buffer, liquidity requirements (e.g., LCR and NSFR), risk weights for residential and commercial property sectors, and measures for intra-financial sector exposures.
  - The DOF may exercise its discretion to make the systemic risk buffer tool available at a future date.

*Source: _cr16316 - References (Appendices I and II), IMF staff compilation.*

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_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2016/_cr16316.pdf_