Ensuring accuracy and integrity of benchmarks Regulation (EU) 2016/1011 on indices used as financial benchmarks It sets common European Union (EU) standards to prevent manipulation of benchmarks* that could affect the price of financial instruments, or financial contracts such as loans or mortgages. Key Points Administrators* responsible for the provision of financial benchmarks must: apply […]
Category: Regulation
Credit Holders [EU]
Framework for credit servicers and credit purchasers Directive (EU) 2021/2167 on credit servicers and credit purchasers It harmonises the rules for credit servicers* and credit purchasers* of a creditor’s rights under a non-performing credit agreement. Its aim is to support development of secondary markets for non-performing loans* in the European Union (EU), while ensuring the […]
Securitisation [EU]
Simpler, more transparent and more standardised securitisation Regulation (EU) 2017/2402 — general framework for securitisation and creating a specific framework for simple, transparent and standardised securitisation It aims to restart a high quality securitisation* market that will: improve the financing of the EU’s real economy; enhance private risk sharing; and ensure investor protection. It creates […]
Compensation Schemes [EU]
Deposit-guarantee schemes The European Union aims to protect the depositors of all credit institutions and to safeguard the stability of the banking system as a whole. Directive 94/19/EC of the European Parliament and of the Council of 30 May 1994 on deposit-guarantee schemes Deposit protection is a key aspect of completion of the internal market […]
Licensing of Banks
Background and Reform As originally constituted in 1942, the Central Bank’s function was to maintain the integrity of the currency and issue legal tender. In 1971, the licensing of banks was provided for. It was provided that a bank shall not in or outside the State carry on banking business or hold itself out or […]
Bank Reorganisation
Special Management Order Courts may make a special management order appointing a special manager to a credit institution meeting certain criteria. The intervention conditions must be fulfilled, and a special management order must be necessary in the circumstances. Before making a special management order proposal, the Central Bank has to give written notice to the […]
State Resolution of Banks
The Bank Guarantee The financial crisis prompted a number of emergency pieces of legislation designed to prevent the collapse of financial institutions. The state’s guarantee of the liabilities of the Irish banks (later extended) was reflected in the Credit Institutions Financial Support Act 2008. This became law on the 2nd of October 2008, 48 hours […]
The Financial Crisis 2007-2012
Background The worldwide financial crisis which commenced in 2007 worldwide followed a period of over 10 years of relatively low inflation and interest rates. In the United States, interest rates were maintained at a low rate, following the bursting of the so-called “dot.com” bubble. In Europe interest rates were maintained low, while Germany emerged from […]
Financial Crisis in Ireland 2007-2012
Joining the Euro Ireland joined the Euro system in 1999 and immediately benefited from a significant fall in interest rates. For the previous 20 years of the Punt’s existence, interest rates had remained high, due to a range of factors, not least the recurrent devaluations of the Irish punt, which led to a risk premium […]
Bank Solvency
Background Ireland ratified the Bretton Woods Agreement at the end of the Second World War establishing the International Monetary Fund and the World Bank. In its early years, the system pegged the exchange rate of currencies to the dollar. The dollar was itself was itself pegged to gold. In 1971 the United States decoupled the […]
Central Bank Reform
Financial Crisi Reform In the wake of the financial crisis, the Central Bank Reform Act 2010 established the Central Bank of Ireland as a single regulator. It is led by the Governor of the Central Bank. The Irish Financial Services Regulatory Authority was dissolved and its functions were brought back under the umbrella of the […]
Central Bank Regulation
Central Bank Regulations The Bank may make regulations for the proper and effective regulation of regulated financial services provided. It may require procedures to be adopted in identifying, monitoring, reporting on risks to which they are exposed, including their management and minimisation; provision regarding administrative accounting, auditing and reporting arrangements of regulated financial providers; provision […]
Central Bank Supervision
Requiring Information and Review The Central Bank Supervision and Enforcement Act 2013 sought to significantly improve and enhance the Central Bank’s powers of supervision over credit institution and financial service providers generally. The Central Bank may require a regulated financial services provider or any related undertaking to it by notice, a report on any specified […]
Deposit Guarantees
EU Directive A 1994 EU directive provides for deposit protection. The rules have been modified and updated in the light of the financial crisis in 2008. There are harmonised deposit guarantee requirements. Each state must ensure one or more deposit guarantee schemes is introduced. States may exempt institutions belonging to a scheme which ensures the […]
Retail Credit & Home Reversiosn
Firms Covered A home reversion firm is a business providing and entering home reversion agreements. A home reversion agreement is a transfer by the owner of a home to a reversion entity for a discounted income with the owner retaining a right to live in the property until specified events are from death or cessation […]
Bank Regulation
Licensing Banks and other credit institutions are licensed and authorised by the Central Bank, formerly the Financial Regulator. A banking business is defined principally, as the taking and receiving monies on deposit. Retail credit firms are regulated in a similar fashion, by the Central Bank. Certain other financial services providers, including, in particular, building societies […]
Bank Regulation [EU]
Regulation of Credit Institutions Credit institutions authorised in one EU state may provide services in other EU states. An institution established in one state may establish a branch in another state. The institution which wishes to provide services or establish a branch in EU another state must notify the authorities of its home state giving […]