Ireland: Report on Observance of Standards and Codes (ROSC)

IMF Staff Country Reports, May 27, 2014

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Ireland: Report on Observance of Standards and Codes (ROSC)

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Bibliographic details

• Published: May 27, 2014
• Series: IMF Staff Country Reports
• DOI: https://doi.org/10.5089/9781498380461.002

Executive summary

• The Central Bank of Ireland has made "significant progress in implementing a proactive and intensive approach to supervision."
• The Probability Risk and Impact System is described as "the backbone of the new risk-based supervisory approach" and is "intellectually appealing."
• Significant progress in reform implementation "was evident to the mission and recognized by market participants."
• The reform process is "relatively young" and "effective implementation is still a work in progress that demands additional skills and resources."
• It is "critical to maintain a clear direction and focus on implementation efforts, and that enforcement powers are used as a successful deterrent, including the new powers the Central Bank of Ireland was given under the Central Bank of Ireland Act 2013."
• The Central Bank of Ireland "has set up sound foundations; however, gauging the full effectiveness of the reforms requires time for the new framework to season and for staff to gain experience through its use."

Major findings

• Implementation progress:
  • "Significant progress" in implementing a proactive and intensive approach to supervision.
  • Recognition of progress by market participants and the mission.
• Risk-based supervision framework:
  • The Probability Risk and Impact System identified as the backbone of the new approach and "intellectually appealing."
• Capacity and resourcing:
  • Effective implementation "is still a work in progress that demands additional skills and resources."
• Enforcement and legal powers:
  • Emphasis that enforcement powers be used as a deterrent, including powers under the Central Bank of Ireland Act 2013.
• Time horizon for assessment:
  • Full effectiveness requires time for the framework to "season" and for staff to gain experience through its use.

Policy recommendations and implementation priorities

• Maintain a clear direction and focus on implementation efforts.
• Allocate additional skills and resources to support effective implementation of the new supervisory framework.
• Use enforcement powers as a successful deterrent, leveraging the new powers under the Central Bank of Ireland Act 2013.
• Monitor and allow time for the new framework and staff experience to mature before gauging full effectiveness.

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• Ireland: Report on Observance of Standards and Codes
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