Irish Central Bank Assesses Financial Stability, Retains CCyB at 0%
The Central Bank of Ireland published the second Financial Stability Review of 2021, which assess the resilience of financial system in the country and outlines key risks facing the financial system. The review finds that, while uncertainty around the path of the pandemic remains, the economic recovery has continued over the past six months, reducing some of the near-term macro-financial risks. The Central Bank also presents the latest review of the macro-prudential policy tools and announces that the countercyclical capital buffer (CCyB) remains at 0%. However, if the economic recovery is not materially disrupted by the resurgence of the virus, the Central Bank of Ireland expects to announce a gradual rebuilding of macro-prudential capital buffers during 2022, to safeguard resilience against future risks.
Post an annual review of the mortgage measures, the Central Bank has decided that the calibration of the mortgage measures will remain unchanged, in light of the ongoing framework review. However, a number of operational changes will be implemented. A “carry-over” system will be introduced for managing allowances. This will permit lenders to carry over any unused allowance share for use in the first half of 2022, on the provision that those loans were approved in 2021. The measures will be amended to clarify the ability of retail banks to participate in the “First Home” shared equity scheme. However, the wider framework review of the mortgage measures is ongoing, with extensive analysis and stakeholder engagement. The review has been informed by an online survey. As part of the process, a public consultation was launched in December, with the comment period on the consultation open until March 16, 2022. The Central Bank of Ireland expects to complete the framework review during the second half of 2022.
The Central Bank of Ireland also launched a consultation on a set of measures to limit leverage and liquidity mismatches for property funds. The proposed limit would be imposed through existing regulation under the Irish transposition of the Alternative Investment Fund Managers’ Directive. The regulator proposes to introduce additional guidance for property funds on aligning their redemption terms with the liquidity of their assets. The feedback period on these proposals ends on February 01, 2022.
Related Links
- Press Release on Financial Stability Review
- Financial Stability Review (PDF)
- Consultation on Mortgage Measures Framework Review
- Consultation on Macro-Prudential Measures (PDF)
Comment Due Date: March 16, 2022 (Mortgage Measures)/February 01, 2022 (Macro-Prudential Measures)
Keywords: Europe, Ireland, Banking, Financial Stability Review, CCYB, Regulatory Capital, Lending, Credit Risk, CRE, Macro Prudential Policy, Central Bank of Ireland
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Trevor Howes
IFRS 17 technical advisor; AXIS actuarial modeling system expert; extensive experience in life insurance and life reinsurance, with focus on modeling, valuation, and financial reporting
Previous Article
EBA Examines Asset Encumbrance in Banking SectorRelated Articles
EU Agencies Update LCR Rule and Macro-Prudential Policy Recommendation
The European Commission (EC) published the Delegated Regulation 2022/786 with regard to the liquidity coverage requirements for credit institutions under the Capital Requirements Regulation (CRR).
EBA Publishes Regulatory Standards to Identify Shadow Banking Entities
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying the criteria to identify shadow banking entities for the purposes of reporting large exposures.
EIOPA Examines Physical Climate Risk Exposure, SII Non-Compliance
The European Insurance and Occupational Pensions Authority (EIOPA) published a report assessing insurers' exposure to physical climate change risks
NGFS Report Explores Quantification of Climate Risk Differentials
The Network for Greening the Financial System (NGFS) published two reports to aid central banks and regulators in their oversight of the financial sector and in their central bank operations
EC Publishes Results on Review of Web Accessibility Directive
The European Commission (EC) published the results of a public consultation, held in October 2021, on the review of the Web Accessibility Directive.
MAS Consults on Adjustment Spreads for Conversion of SOR Contracts
The Monetary Authority of Singapore (MAS) and the SC-STS are jointly consulting, until June 10, 2022, on setting adjustment spreads for the conversion of legacy SOR contracts to SORA reference rate.
OSFI Discusses Benchmark Rate Transition, Sets Out Work Priorities
The Office of the Superintendent of Financial Institutions (OSFI) published the strategic plan for 2022-2025 and the departmental plan for 2022-23.
EBA Proposes Standards to Support Secondary NPL Markets
The European Banking Authority (EBA) is consulting, until August 31, 2022, on the draft implementing technical standards specifying requirements for the information that sellers of non-performing loans (NPLs) shall provide to prospective buyers.
EU Confirms Agreement on Rules on Cybersecurity and Banking Resolution
The European Council and the Parliament reached an agreement on the revised Directive on security of network and information systems (NIS2 Directive).
EBA Issues Standards for Crowdfunding Service Providers Under ECSPR
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying information that crowdfunding service providers shall provide to investors on the calculation of credit scores and prices of crowdfunding offers.
