Central Bank of Ireland Publishes Systemic Risk Pack in March 2019
Central Bank of Ireland published the Systemic Risk Pack, which presents the bank's approach, including indicators and visualization methods, for monitoring systemic risk in the Irish financial system. The systemic risk pack includes a set of summary heatmaps and a selection of noteworthy or topical charts for consideration. While the heatmaps provide a useful overview of the systemic risk landscape, they are also a very simple risk assessment tool. For example, they do not take into account dynamics in the broader financial system or real economy which will determine whether or not an indicator’s level can be considered excessive or unstable.
In the systemic risk pack, explanation of indicators used is provided for each section in the form of a glossary and metadata table. The heatmaps aim to distill information and highlight areas of elevated risk by color coding indicators in line with their deviation from levels associated with financial system stability (thresholds). The indicators presented in the systemic risk pack are drawn from the broad range of data available to the Central Bank of Ireland. These include publicly available data as well as commercially sourced data supplied by third parties and data reported by regulated entities. The approach that has been taken to develop the risk pack makes it a very flexible tool and will allow for it to evolve over time, as new data sources become available, other relevant indicators are identified, and approaches to data visualization evolve.
This publication builds on the existing work regarding the use of macro-prudential indicators in policy setting. This biannual publication is created to facilitate macro-prudential analysis and to focus policy maker discussion. It complements the existing financial stability analysis by providing a comprehensive systemic perspective, along with the detailed approach provided in other publications.
Related Link: Systemic Risk Pack (PDF)
Keywords: Europe, Ireland, Banking, Systemic Risk, Macro-Prudential Policy, Financial Stability, Risk Assessment Tool, Central Bank of Ireland
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Blake Coules
Across 35 years in banking, Blake has gained deep insights into the inner working of this sector. Over the last two decades, Blake has been an Operating Committee member, leading teams and executing strategies in Credit and Enterprise Risk as well as Line of Business. His focus over this time has been primarily Commercial/Corporate with particular emphasis on CRE. Blake has spent most of his career with large and mid-size banks. Blake joined Moody’s Analytics in 2021 after leading the transformation of the credit approval and reporting process at a $25 billion bank.
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Related Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
