The Minister for Finance Michael McGrath has signed an Order to commence a large part of the Central Bank (Individual Accountability Framework) Act 2023 with effect from today (19 April 2023).
The sections commenced will, among other things, provide for:
Enhancements to the operation of the Central Bank’s Fitness & Probity (F&P) regime, in particular to the Central Bank’s enforcement powers, making it more efficient, more effective, and ensuring it continues to conform to the required standards of fairness.
Extension of the F&P regime to certain categories of holding companies thus making it available to the Central Bank as a supervisory and enforcement tool in relation to them.
Amendments to the Central Bank Act 1942, in particular Part IIIC of that Act, which deals with the Central Bank's Administrative Sanctions Procedure. These amendments will make changes to the operation of the Administrative Sanctions Procedure (ASP) to clarify the processes involved, to ensure it continues to conform to the required standards of fairness in its procedures, and to adapt the ASP to provide for enhanced individual accountability.
Enhancements to the ASP will give the Central Bank power to take enforcement action directly against individuals for breaches of their obligations rather than only for their participation in breaches committed by a firm.
The additional powers that will be provided to the Central Bank are significant and care has been taken to adopt the correct balance between these powers and the protection of individuals’ constitutional rights.
Speaking today, Minister McGrath described the new legislation as a significant enhancement of the powers of the Central Bank.
“Today, as a large part of the Central Bank (Individual Accountability Framework) Act comes into operation, marks an important further step in work to transform the culture of the financial services industry in Ireland.”
Minister McGrath said, “I look forward to commencing the remainder of the Act later this year, giving the Central Bank of Ireland the regulatory tools necessary to ensure that consumers dealing with financial service providers in this country can be confident that their best interests will be protected. I would ask the financial services sector to engage with the consultation process put in place by the Central Bank so that their views can be taken into account by the Central Bank as it progresses work on the Senior Executive Accountability Regime, the certification of individuals’ fitness and probity, and the various guidance documents covering the Individual Accountability Framework, including the guidance on the Conduct Standards.”
“Ultimately a key challenge is to continue to rebuild trust in the financial sector following the Global Financial Crisis. This will require ongoing cultural and practical change in the banking sector and throughout the financial services industry building on the progress that has been made to date.
“The Central Bank (Individual Accountability Framework) Act 2023 should make a significant contribution to bringing about this needed cultural change. This is the ultimate aim of this legislation.”
