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
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Previous Article
FCA Publishes Findings from Consumer Research on Crypto-AssetsRelated Articles
PRA Proposes Changes to Consolidated Prudential Rules Under CRD5/CRR2
PRA proposed rules (in CP12/21) for the application of existing consolidated prudential requirements to financial holding companies and mixed financial holding companies that have been approved or designated in accordance with Part 12B of the Financial Services and Markets Act 2000 (FSMA).
ECB Extends Leverage Ratio Relief for Banks Until March 2022
ECB Banking Supervision announced that euro area banks it directly supervises may continue to exclude certain central bank exposures from the leverage ratio until March 2022.
OSFI Consults on Treatment of Credit Valuation Adjustments
OSFI decided to increase the Domestic Stability Buffer from 1.00% to 2.50% of total risk-weighted assets, with effect from October 31, 2021.
HKMA Requires Banks to Submit Plans for Fintech Adoption
HKMA is requesting banks to participate in a tech baseline assessment, which forms part of the HKMA Fintech 2025 strategy.
OSFI Consults on Operational Risk Capital Data Management Expectations
OSFI published two documents to consult on the management of operational risk capital data for institutions required, or for those applying, to use the Basel III standardized approach for operational risk capital in Canada.
NGFS on Addressing Financial Stability Issues from Biodiversity Loss
The NGFS Study Group on Biodiversity and Financial Stability published a Vision paper exploring the case for action in addressing the financial stability concerns arising from biodiversity loss.
ACPR Publishes CREDITIMMO Version 2.3.0 Taxonomy for Banks
ACPR published the final version of CREDITIMMO 2.3.0 taxonomy for the decree of October 31, 2021.
EC Prolongs Italian Guarantee Scheme for Non-Performing Loans
EC, has approved, under the EU State Aid rules, the fourth prolongation of the Italian guarantee scheme to facilitate the securitization of non-performing loans.
ECB Amends Guideline on Temporary Collateral Easing Measures
ECB published Guideline 2021/975, which amends Guideline ECB/2014/31, on the additional temporary measures relating to Eurosystem refinancing operations and eligibility of collateral.
EIOPA Releases Report on Artificial Intelligence Governance Principles
EIOPA published a report, from the Consultative Expert Group on Digital Ethics, that sets out artificial intelligence governance principles for an ethical and trustworthy artificial intelligence in the insurance sector in EU.
