Central Bank 'will stop banks doing business' if controls are lacking

The Central Bank has warned financial institutions that they will be stopped from doing business if they do not have sufficient controls in place.

It also says the new "intrusive" approach to regulation is here to stay, but that banks who perform well will get less scrutiny.

In a new policy paper, the Central Bank has said that some institutions still do not appear to have thought through what their failures in the lead-up to the crisis mean for future behaviour.

There will now be a greater intrusiveness in supervision, which the regulators admit was "sadly lacking" previously, and there will be incentives for those who manage risk properly.

Penalties will include preventing banks from doing business unless or until proper controls are put in place.