On 29 May 2025, the Central Bank of Ireland, (“Central Bank”) published its Annual Report 2024 and Annual Performance Statement 2024-2025 (“Report”).

The Report is divided into two parts, with part 1 dealing with the Report itself, while part 2 addresses the Central Bank’s financial operations.

The Report is a detailed and comprehensive document and for the purposes of this update, the focus is on the following:

Chapter 1: Implementing Our Strategy 2022-2026

Some of the matters highlighted in this chapter include:

• the updating of the Central Bank’s strategy in September 2024, for more information, see FIG Top 5 at 5 dated 24 October 2024; and
• an overall summary of the achievement of objectives, over 2024, across the Central Bank’s four interconnected themes of future-focused, open and engaged, transforming and safeguarding. Some of the matters highlighted include the innovation sandbox programme / establishment of a digital euro unit / the new supervisory framework and associated organisational structure / preparations as regards the implementation of new cross-sectoral legislation such as DORA and MiCA.

Chapter 2: Delivering our Responsibilities

Matters addressed in this chapter include:

• price stability - addressing areas such as monetary policy decisions / Eurosystem monetary policy operations / Irish monetary policy operations;
• financial stability - highlighting the publication of two financial stability reviews in 2024, for more information, see FIG Top 5 at 5 dated 13 June 2024 / macroprudential policy;
• climate change – highlighting publications dealing with the macroeconomic impact of climate change and insurance flood protection gaps and the preparation of the Central Bank’s climate observatory for 2024 – for more information, see FIG Top 5 at 5 dated 16 January 2025;
• resolution – dealing with resolution planning and enhanced resolvability / resolution actions (none for 2024) / resolution funds / the deposit guarantee scheme and insurance compensation fund. As regards the insurance compensation fund, it is noted that the fund paid €4.8m to the State Claims Agency in respect of two insolvent entities namely: Gefion Finians A/S (Denmark) (In Bankruptcy) and Setanta Insurance Company Limited (Malta) (In Liquidation). The fund also paid €0.8m to the Liquidators of Enterprise Insurance Company Plc (Gibraltar) (In Liquidation);
• payment systems and currency – covering matters such as TARGET Services / digital euro;
• financial regulation and supervision – considering areas such as:
  • the risk landscape, noting the increased risk due to the greater use of outsourcing, generative AI / the strengthening of the Central Bank’s supervisory framework, with the new supervisory approach operational since January 2025;
  • a consideration of the key financial regulation and supervision activities in 2024 across all of the sectors regulated by the Central Bank together with a lengthy piece on key activities regarding consumer and investor protection. Here, the Central Bank, through its supervisory work, identified a range of good practices and areas where improvements are required by firms, some of which are as follows:
    • the need for investment firms to ensure marketing and advertising communications are fair, clear and not misleading;
    • setting out to insurance firms how to better identify, manage and mitigate risks to consumers following a targeted consumer protection risk assessment;
    • a review of minimum competency, knowing the customer and suitability standards in retail intermediaries; and
    • the Central Bank highlighted that some firms are falling short when it comes to internalising a consumer-focused culture into their commercial decision-making and also found that there is a lack of attention in to the level of service received by consumers in their day-to-day activities. Accordingly, the Central Bank has taken the opportunity to highlight, in the Report, that there will be a continued focus on customer service and complaints handling by firms as a core supervisory topic into 2025.
  • authorisations and gatekeeping – for more information, see FIG Top 5 at 5 dated 22 May 2025;
  • review of the fitness & probity regime – for more information, see the authorisations and gatekeeping report covered in FIG Top 5 at 5 dated 22 May 2025;
  • enforcement and inquiries – a summary of Central Bank enforcement actions in set out in the Report. The Report also addresses inquiries and highlights the Irish Nationwide Building Society inquiry, for more information, see FIG Top 5 at 5 dated 29 May 2025;
  • the Report also considered fitness and probity investigations / financial crime / unauthorised providers / protected disclosures / financial sanctions / AML and CFT ;
  • policy and legislative pipeline – the Report provides a summary of its actions as regards the following:
    • Individual Accountability Framework (“IAF”);
    • review of Consumer Protection Code (“CPC”);
    • the work of the consumer advisory group; and
    • MiCA.
    • artificial intelligence (“AI”) – emphasising that the Central Bank ranked AI amongst the technology with the greatest transformational potential in its 2024 Regulatory and Supervisory Outlook Report, for more information on that report, see FIG Top 5 at 5 dated 6 March 2025;
• the orderly and proper functioning of financial markets – addressing matters such as a resilient well-functioning system / well run firms and orderly markets / enhancing consumer protection.

Chapter 3: Enabling Our Organisation

Amongst other matters, the following areas are considered in the chapter:

• the Central Bank’s use of technology, noting that a key area of focus has been investment in cloud technologies  and the prioritisation of cybersecurity;
• engagement with stakeholders, highlighting events such as the Financial Industry Forum / the Financial System Conference, for more information, see FIG Top 5 at 5 dated 21 November 2024  / industry workshops; and
• complaints handling.

Chapter 4: Our Priorities for 2025

Some of the priorities set out in the Report are as follows:

• the provision of independent research, economic advice and commentary on the medium term risks, challenges and opportunities for the Irish economy, households and firms, and on monetary policy research and analysis;
• a focus on payments innovation;
• the prioritisation of the development of a framework to protect access to cash services and the resilience of the cash system;
• simplifying supervisory and regulatory processes in Ireland, highlighting the Central Bank’s intention to continue to proactively engage with this agenda, domestically and internationally, noting that the new supervisory framework is an important part of the simplification process; and 
• as regards specific financial regulation priorities, the priorities set out in the Central Bank’s Regulatory and Supervisory Outlook Report, are restated. For more information, see FIG Top 5 at 5 dated 6 March 2025. 

The Report restates the Central Bank’s overarching supervisory objective, that is, the existence of a stable, resilient and trustworthy financial sector, operating sustainably in the best interests of consumers and the wider economy. Further, the Report highlights that the Central Bank will continue to take a risk-based approach, emphasising that it does not operate a no-failures regime but, rather, works to ensure any firms that fail do so in an orderly way.

The Report also highlights its supervisory priorities for 2025 as ensuring that consumers are protected, firms are resilient and the system is stable, particularly in light of the persistently high geopolitical tensions and the associated uncertainty about the macroeconomic outlook.

Remainder of Report

Chapter 5 of Part 1 deals with the Central Bank’s internal audit statement.

As mentioned above, Part 2 of the Report addresses the Central Bank's financial operations.

Blog Post

Coinciding with the publication of the Report, Governor of the Central Bank, Gabriel Makhlouf, published a blog post where he provides an overview of the economic outlook, summarises the Central Bank’s achievements in 2024 and also gives an update on the Central Bank's financial position at the end of 2024.

On 13 May 2025, the Financial Services And Pensions Ombudsman (Amendment) Act 2025 (Commencement) Order 2025 (“Commencement Order”) was published in Iris Oifigiúil.

The Commencement Order provides that 9 May 2025 is appointed as the day on which the Financial Services and Pensions Ombudsman (Amendment) Act 2025 (“2025 Act”)  shall come into operation.

This development follows on from the signing into law of the 2025 Act by the President  on 15 April 2025.

The 2025 Act amends the  Financial Services and Pensions Ombudsman Act, 2017, to include:

• that the Financial Services and Pensions Ombudsman (“FSPO”) can carry out its statutory functions as per the Constitution of Ireland on foot of the Supreme Court decision in Zalewski v Adjudication Officer & Ors [2021] IESC 24;
• clarification of the respective remits of the FSPO and the Credit Reviewer
• clarification of the definition of ‘financial services provider’ in respect of providers that have exited the Irish market; and
• a number of other administrative amendments.

Impact

One of the main impacts of the 2025 Act is the clarification that the FSPO may investigate complaints concerning financial service providers and pensions providers, which are no longer regulated by the Central Bank of Ireland but were regulated at the time of the impugned conduct.

Additionally, the 2025 Act provides enhanced legal clarity for the statutory operation of the FSPO.

The 2025 Act is now fully in force.

On 22 May 2025, the European Banking Authority (“EBA”) launched a consultation (“Consultation”) on draft implementing technical standards (“draft ITS”) amending Commission Implementing Regulation (EU) 2024/3172 as regards the disclosures on ESG risks, equity exposures and the aggregate exposure to shadow banking entities. These are the Pillar 3 disclosures under CRR3.  

The draft ITS are part of Step 2 of the implementation of the disclosure requirements in the CRR3 banking package, as set out in the EBA’s "Roadmap on Strengthening the Prudential Framework”. For more information, see FIG Top 5 at 5 dated 21 December 2023.

The Consultation aims to enhance transparency and consistency of disclosures, while simplifying the reporting process for institutions. Some of the matters addressed in the Consultation include:

• the streamlining of the new requirements for shadow banking and equity exposures;
  
• clarifications on the application of the guidelines on non-performing exposures and forbearance; and
  
• the extension of the scope of institutions required to disclose ESG information, covering not only large listed institutions but also large non listed and other institutions, SNCIs, and large subsidiaries.
  

The Consultation sets out that the EBA has designed a proportionate approach for ESG disclosures based on the institution’s type, size and complexity, with simplified disclosures for banks other than large, particularly for those that are small or non-listed. This, it is stated, is in line with the European Commission’s omnibus proposal to reduce reporting costs and simplify sustainability reporting.

The Consultation does not introduce any new requirements for banks that are already disclosing ESG related information but, rather, aims to simplify the reporting process by clarifying the existing requirements. The EBA states that this is achieved by: 

• the introduction of materiality considerations regarding the frequency of some of the disclosures; and
  
• by  ensuring full and permanent alignment with the taxonomy regulation in terms of scope and definition of the green asset ratio templates.
  

The Consultation also contains transitional provisions to support institutions in preparing for the amended ESG disclosure requirements.  

During the period of time between the publication of the Consultation and until the draft ITS are in force, the EBA encourages competent authorities to provide institutions with the flexibility envisaged in the transitional provisions.

In addition, the EBA  will provide an updated mapping tool between Pillar 3 and supervisory reporting to support implementation by institutions.

Next Steps

The Consultation is open for feedback until 22 August 2025. Following an assessment of feedback received, the EBA will submit the final draft ITS to the European Commission for endorsement.

On 22 May 2025, the European Banking Authority (“EBA”) published an onboarding plan (“Plan”) for large and other institutions which sets out the steps required for accessing and submitting information to the new Pillar 3 data hub (“P3DH”).

The P3DH is the EBA’s centralised platform for the submission of public disclosures under the Capital Requirements Regulation (“CRR3”).

The Plan is divided into a number of sections as follows:

• section A  gives an overview of the onboarding process;
• section B provides a detailed description of the onboarding steps including the collection of bank representative’s contact details / the sending of individual EBA letters to institutions in scope of P3DH / the submission by institutions of details as to required contact persons information / the set up of user accounts for the designated contact persons / accessing the P3DH platform;
• section C addresses the timeline as regards onboarding which follows a phased-in approach, There are transitional provisions that are intended to allow time for institutions to prepare for the process. During the transitional period, institutions will be able to comply with their Pillar 3 obligations as usual, publishing on their own website with the usual timeline, without waiting for the submission to the P3DH. This means that compliance with CRR3 requirements will not be impacted; and
• section D sets out details regarding the EBA P3DH helpdesk. 

The EBA has also published a list of FAQs with the aim of assisting institutions during the first implementation and data submission process.

Next Steps

The EBA encourages all relevant institutions to familiarise themselves with the onboarding process and begin preparations for the P3DH implementation.

The P3DH information will be available to the public from December 2025.

On 2 June 2025, José Manuel Campa, chair of the European Banking Authority, (“EBA) delivered a speech (“Speech) at a high-level meeting on banking supervision. 

The theme of the Speech centred around the need for an efficient regulatory framework for financial services. Mr Campa gave a summary of the evolution of the current topical matter that is regulatory simplification, referencing the Letta and Draghi reports, and noting that it is now one of the top priorities of the European Commission (“Commission”).

Mr Campa noted that the idea of regulatory simplification has also been referred to as burden reduction, deregulation or a need for more proportionality. However, he choose to focus on efficiency, highlighting that this best reflects what is trying to be achieved – “using our tools and resources in the best possible way and reducing any deterrent effects of complex regulations.”

In addition, Mr Campa also focused on effectiveness and distinguished it from the notion of efficiency, noting that effectiveness focuses on whether “we are achieving our goals with the regulation that we have.”

In that context, some of the matters highlighted by Mr Campa include the following:

• following regulatory changes after the great financial crisis of 2008, banks now have higher and better capital requirements, improved efficiency and profitability, have strengthened their risk management practices and have better governance arrangements. This has supported sustainable and long-term growth, such that Mr Campa notes that most supervisors are not in favour of de-regulation in itself nor for the reduction of capital requirements;
• by way of illustrating the work of the EBA over the last number of years as regards a better, more proportionate and less complex regulatory framework, Mr Campa highlighted the following EBA initiatives:
  • the establishment of  the Advisory Committee on Proportionality;
  • progress as regards the Securitisation Regulation, further noting that the Commission is making proposals in this area to enhance this market; and
  • two reports published in 2021 addressing the burden of reporting and the feasibility of having a single reporting framework within the EU, respectively.

• Mr Campa highlighted areas that the EBA has been considering as regards improving efficiency and effectiveness within the EBA’s mandate, some of which are as follows:
  • the way in which the EBA produces level 2 and level 3 legislative measures, noting that the list of legislative mandates has been growing since 2011.  He further stated that there is merit in considering whether the existing level 2 and level 3 regulation is still fit for purpose and can be implemented by institutions that are subject to these standards in a simple and efficient manner, for example, remuneration, where the number of distinct pieces of regulation could be streamlined;
  • a need to better assess the impact of each mandate for stakeholders and to better prioritise the effort to produce these new pieces of regulation with a view to improving their efficiency and their contribution to a well-functioning Single Market;
  • a prioritisation of those mandates as regards level 2 and level 3 legislation that are mostly needed to improve the efficiency of the EU single rulebook for financial services;
  • collaboration with supervisory and other competent authorities in order to assess actual use of reported data, avoiding duplications and ad-hoc requests; and
  • a review of all supervisory convergence tools with the aim of ensuring they are used to their full potential.
• Mr Campa discussed the merit of the EBA sharing its views on how prudential regulation is interacting with other pieces of regulation within the EU regulatory financial services' framework, although noting that this most likely goes beyond the remit of the EBA