Central Bank promises not to lower standards amid simplification push

Central Bank of Ireland governor Gabriel Makhlouf said changes to the regulatory framework are not about “‘lowering standards” but rather “improving quality, coherence and clarity”.

The governor of the Central Bank has promised that the agency will not lower its standards when it comes to regulating the financial system as it outlines a new framework aimed at improving efficiency.

In its report, Regulating & Supervising Well – A More Effective and Efficient Framework, the Central Bank outlined its simplification roadmap for the next three years as well as its new approach to a more efficient regulatory and supervisory framework.

The Central Bank said the report sets out a “comprehensive multi-year programme of initiatives to deliver further efficiencies and effectiveness across regulation, supervision, gatekeeping and reporting”.

Governor Gabriel Makhlouf said a well-functioning financial system is “essential” to a well-functioning economy.

“As Europe focuses on improving competitiveness and resilience, there is a clear opportunity to streamline rules and processes without weakening the important protections we have built over the past decade,” he said.

In terms of regulation, the Central Bank is updating its domestic rulebook, retiring or consolidating outdated provisions, and aligning national requirements with evolving EU frameworks.

Among the initiatives include a major compatibility review of insurance regulations, updating the credit union handbook following the simplification of the credit union lending framework, as well as an updated cross-sectoral guidance on operational resilience, outsourcing, and governance.

It is also undertaking a review of domestic reporting requirements.

“The Central Bank will establish a Gatekeeping Division to further enhance consistency, transparency and timeliness across authorisations and fitness and probity processes,” it said.

“We are making regulation and supervision more effective, easier to navigate, proportionate, and aligned with risk, while maintaining the resilience and safeguards that underpin people’s trust in the financial system,” Mr Makhlouf said, adding that this is not about “‘lowering standards” but rather “improving quality, coherence and clarity”.

Deputy governor Mary-Elizabeth McMunn said success of this new framework will be “a regulatory system that is clearer, more coherent and more proportionate, while continuing to protect consumers, investors, and hard-won financial stability”.