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
APRA Publishes Results of Climate Risk Self-Assessment Survey
The Australian Prudential Regulation Authority (APRA) has published the findings of its latest climate risk self-assessment survey conducted across the banking, insurance, and superannuation industries.
ACPR Publishes Updates Related to CRD IV and Covered Bonds
The French Prudential Supervisory Authority (ACPR) published a notice related to the methods for calculating and publishing prudential ratios under the Capital Requirements Directive (CRD IV) and the minimum requirement for own funds and eligible liabilities (MREL).
BIS Paper Contributes to Debate on Regulating NBFIs and Big Techs
The Financial Stability Institute (FSI) of the Bank for International Settlements recently published a paper proposing a framework for classifying financial stability regulation as either entity-based or activity-based.
EIOPA Publishes Guidance on Climate Change Scenarios in ORSA
The European Insurance and Occupational Pension Authority (EIOPA) published the risk dashboard based on Solvency II data and the final version of the application guidance on climate change materiality assessments and climate change scenarios in the Own Risk and Solvency Assessment (ORSA).
EBA and ECB Respond to Proposals on Sustainability Disclosures
The European Banking Authority (EBA) and the European Central Bank (ECB) published their responses to the consultations of the International Sustainability Standards Board (ISSB) and the European Financial Reporting Advisory Group (EFRAG) on sustainability-related disclosure standards.
BIS Report Notes Existing Gaps in Climate Risk Data at Central Banks
A Consultative Group on Risk Management (CGRM) at the Bank for International Settlements (BIS) published a report that examines incorporation of climate risks into the international reserve management framework.
EBA Publishes Multiple Regulatory Updates for Regulated Entities
The European Banking Authority (EBA) published the final guidelines on liquidity requirements exemption for investment firms, updated version of its 5.2 filing rules document for supervisory reporting, and Single Rulebook Question and Answer (Q&A) updates in July 2022.
EIOPA Issues SII Taxonomy and Guide on Sustainability Preferences
The European Insurance and Occupational Pensions Authority (EIOPA) published Version 2.8.0 of the Solvency II data point model (DPM) and XBRL taxonomy.
EESC Opines on Proposals on CRR and European Single Access Point
The European Union published, in the Official Journal of the European Union, an opinion from the European Economic and Social Committee (EESC); the opinion is on the proposal for a regulation to amend the Capital Requirements Regulation (CRR).
HM Treasury Publishes Multiple Regulatory Updates in July 2022
HM Treasury published a draft statutory instrument titled “The Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2022,” along with the related explanatory memorandum and impact assessment.
