The Central Bank has radically changed its enforcement strategy following the financial crisis.\u00a0 It has adopted a new risk-based regulatory framework focused on being more assertive and prioritising the allocation of resources to the areas of greatest risk.\u00a0 In 2011, the Central Bank launched its risk-based supervision framework PRISM (Probability Risk and Impact System).\u00a0 It focuses on firms with the greatest risk to financial stability and consumers.<\/p>\n
PRISM divides regulated firms into different categories.\u00a0 Four categories based on the level of risk to the financial system and consumers; high impact, medium impact, medium-high impact or low impact.\u00a0 This determines the assignment of regulatory resources.<\/p>\n
Engagement with the regulated entity is by way of reviews, inspection, on-site meetings and ongoing engagement.\u00a0 Firms in the high and medium-high and medium-low category have their risk assessed across a number of categories.<\/p>\n
The Central Bank has stated that sanctions must carry a credible threat of action.\u00a0 This includes, in particular, administrative sanctions with very significant penalties in respect of prescribed contraventions.<\/p>\n
The legislation passed in 2010, including in particular the Central Bank Supervision and Enforcement Act, the subject of a separate article significantly increases investigative and information-seeking powers and gives a wide range of penalties.\u00a0 Penalties up to \u20ac1 million per individual may be imposed. Penalties of up to \u20ac10 million or 10% of turnover may be imposed in respect of a body corporate.<\/p>\n\n
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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. \u00a0In 1971, the licensing of banks was provided for.\u00a0 It was provided that a bank shall not in or outside the State carry on banking business or hold itself out or […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[49],"tags":[],"_links":{"self":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/651"}],"collection":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/comments?post=651"}],"version-history":[{"count":4,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/651\/revisions"}],"predecessor-version":[{"id":655,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/651\/revisions\/655"}],"wp:attachment":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/media?parent=651"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/categories?post=651"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/tags?post=651"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}