FIG Top 5 at 5 – 29/01/2026

On 28 January 2026, the Central Bank of Ireland (“Central Bank) published a consultation paper on prohibition notices under the fitness and probity (“F&P”) regime (“CP166”).

The Central Bank has highlighted that CP166 is separate from its 2025 consultation an amendments to the F&P regime (CP160) – for more information, see FIG Top 5 at 5 dated 27 November 2025.

Under the F&P regime, the Central Bank may impose a prohibition on an individual where they do not meet the required standards of F&P. CP166 aims to gather feedback from stakeholders regarding the approach taken by the Central Bank to prohibition.

F&P investigations pillar

CP166 highlights that it relates to the Central Bank’s investigations pilar, being one of the three key pillars on which the F&P regime is grounded. CP166 goes on to explain the fact that the F&P investigations pillar may be applied to people in controlled functions (“CF”) or pre-approval controlled functions (“PCF”) and is one of the administrative enforcement procedures of the Central Bank.

Additional guidance

In 2023, the Central Bank made a number of changes to its regulations and guidance regarding the F&P investigations pillar, which were necessitated by the Central Bank (Individual Accountability Framework) Act 2023 (“IAF”). These changes were communicated to industry by letter dated 21 April 2023. The Central Bank is now proposing to provide additional guidance (“Supplemental Guidance”) to further clarify its prohibition procedures.

The Supplemental Guidance is contained in an annex to CP166. The Central Bank advises that the Supplemental Guidance should be read in conjunction with its F&P Investigations, Suspensions and Prohibitions Guidance of April 2023 (“Main Guidance”) and notes that the Supplemental Guidance will eventually be subsumed into the Main Guidance.

Guidance contents

CP166 explains that the Supplemental Guidance outlines the circumstances that will be taken into account by a decision maker when deciding on the nature of  prohibition, including the scope and duration.  The Supplemental Guidance also contains guidance on specified conditions in the event that a prohibition is imposed with conditions. Some further matters, that the Supplemental Guidance addresses, include:

• the cessation of a prohibition notice;
• requests to the Central Bank for the termination of a prohibition agreement;
• applications to the High Court for the revocation or variation of a confirmed prohibition notice; and
• publication of a prohibition notice.

Consultation questions

CP166 particularly welcomes responses regarding the following:

• whether the Supplemental Guidance is helpful and other useful information that could be included;
• views on the circumstances relevant to prohibition as contained in table 1 of the Supplemental Guidance; and
• observations on any other aspects of the Supplemental Guidance.

Next Steps

CP166 is open for feedback until 25 March 2026. Such feedback is to be submitted via email at ProhibitionsConsultation@centralbank.ie. The Central Bank will issue a feedback statement in due course.

On 27 January 2025, the Central Bank of Ireland (“Central Bank”) published its Climate Observatory 2025 (“Observatory”). Using a combination of internal analytics and external data sources, the Observatory provides a yearly, evidence-based view of climate science, progress as to decarbonisation and evolving financial risks.

The Observatory consists of six sections, addressing the following areas:

Part A – climate change: source and impact – some of the areas addressed by the data in this section include global fossil fuel consumption / average global temperatures / economic losses from extreme weather events.

Part B – global transition to net zero – here the data in the Observatory relates to matters such as,  green energy investment / costs for renewable projects / global carbon prices and fossil-fuel subsidies;

Part C – Irish financial sector – here, the Observatory emphasises that real economy impacts of climate change directly affect the financial system. In that regard, some of the matters highlighted include:

• increasing weather-related losses affect insurance pricing / availability and the value of assets exposed to climate risk;
• as regards banks, the capacity of borrowers to repay can be affected by climate events and also by policy driven cost changes. The Observatory also makes the point that collateral values can decrease due to physical risks and higher future energy costs linked to low energy efficiency;
• when it comes to investors, changes in policy or investor preferences towards greener assets can result in rapid repricing; and
• the financial system has an important role to play when it comes to the speed and success of the transition in that many households and firms will need finance for low carbon technologies and to adapt to a changing climate.

In section C, the Observatory also sets out data and statistics relevant to the Irish financial sector, some of which are as follows:

• the share of green mortgages increased from 15.5% in Q2 2020 to 43.6% in Q2 2025;
• approximately 6% of domestic business loans lie in flood risk areas, rising to 12–16% under future scenarios;
• banks’ corporate loan books have become more carbon intensive and have exceeded euro area averages;
• physical risks in the insurance sector are mainly non-domestic;
• over one-tenth of insurance sector assets are in climate policy relevant sectors;
• approximately half of corporate lending is to economic sectors with elevated transition risk; and
• carbon intensity in investment, insurance and pension funds has declined which, the Central Bank explains, is broadly aligned with euro area trends.

Part D – Irish economy – this section sets out data related to Ireland’s greenhouse-gas emissions / the carbon intensity of Ireland’s electricity / the growth in residential solar installations;

Part E – nature and biodiversity; and

Part F – Central Bank emissions and investments – amongst other things, this section sets out details as to the Central Bank’s sustainable-debt investment target.

Role of central banks and prudential supervision

The Observatory also addresses the role of central banks and prudential supervision, highlighting the ways in which climate change can affect the mandate of central banks, addressing matters  such as financial stability / macroprudential policy / insurance availability / consumer protection / price stability / market functioning and payments / data, research and international cooperation.

Specifically on the topic of prudential supervision, the Observatory sets out that climate-related credit losses, increased insurance claims, collateral impairments and impacts on investments can all have an effect on the sustainability of financial market participants’ business models. The Observatory goes on to highlight that supervisory authorities are incorporating such risks into supervisory guidance and activities, expecting that firms will embed them in their risk management and governance frameworks and will also integrate climate scenarios into stress tests.

1. Participants in Central Bank innovation in payments sandbox are announced

On 22 January 2026, the Central Bank of Ireland (“Central Bank”) published the details of the nine participants that have been selected for the Central Bank’s second innovation sandbox programme (“Sandbox”). The theme of the Sandbox is “Innovation in Payments” – for more information, see FIG Top 5 at dated 25 September 2025.

The Central Bank received 38 applications from multiple countries and from across the innovation ecosystem, which the Central Bank has said reflects “a strong appetite for innovation.”

The nine participants, who the Central Bank stated, are creating easier and more secure payment and finance solutions, are as follows:

• Antreo – this is a secure way to link verified ESG data to payments to enable organisations to capture, share and audit sustainability information;
• FacePOS – this is a pay by account  wallet for consumers and businesses using facial recognition for instant payments at point of sale;
• Monee – this is a digital financial market infrastructure provider enabling cross-border payments and securities settlement between the UK and Ireland;
• Narrative and Bank of Ireland – Narrative’s AI‑native platform transforms open banking data into digital CFO guidance, aiming to boost financial health and lending readiness for small businesses;
• Ostia – consisting of a governance platform for AI agents in open banking;
• Payemoji – an AI powered payments business service, provide secure card-not-present payments and refunds;
• Pocket Fund Technologies Ltd trading as Maximo with Irish Life as a strategic partner – Maximo is an application programming interfaces (“API”) fintech that enables life companies to connect their clients to their pension and tax refund options;
• PTSB and BarraLake – BarraLake’s sustainable analytics and reporting engine (“SARE”) platform powers the initiative with a cloud based API-ready system that tokenises digital assets for next-generation value exchange; and
• StableGreen – this participant is developing systems that power agreement driven payment models in regulated markets.

Next Steps

The Sandbox will run over the next six months after which the Central Bank will publish a report setting out the key learnings from the Sandbox , including information on the thematic learnings and on the operation of the Sandbox.

2. Central Bank announces CASP authorisation required via portal from Q2 2026

On 21 January 2026, the Central Bank of Ireland (“Central Bank”) updated its  Markets in Crypto Assets Regulation (“MiCA”) communications and publications webpage to state that, in early Q2 2026, applicant firms seeking a crypto asset service provider (“CASP”) licence under MiCA will be required to submit all relevant application documentation via the Central Bank portal (“Portal”).

System guide

The Central Bank has advised that it will issue a system guide at the end of Q1 2026. This is aimed at providing an opportunity for applicant firms to familiarise themselves with the Portal before the new system becomes operational.

Benefits

The Central Bank highlighted the benefits associated with the submission of applications through the Portal such as, a streamlined submission process, improved transparency, secure messaging and the ability to securely access and retrieve previously submitted documentation.

Next Steps

Further information will be made available by the Central Bank on its MiCA FAQs webpage.

On 22 January 2026, the European Central Bank (“ECB”) and the European Systemic Risk Board (“ESRB”) published a joint report (“Report”) on the financial stability risks stemming from geoeconomic fragmentation.

The Report provides a comprehensive toolkit for analysing the relationship between financial stability, geopolitical risks and uncertainty. It also provides a framework to enable an understanding of the different types of geopolitical and geoeconomic risks that have direct and indirect effects on the economy of the EU and its financial system.

Risk monitoring

The Report sets out that it makes three key contributions to risk monitoring:

• it provides a monitoring toolkit for indicator-based analysis of geopolitical risks that can be readily integrated into existing financial stability frameworks;
• it considers the macro-financial transmission of geopolitical shocks using state-of-the-art econometric models; and
• it draws on granular datasets to document how banks and non-banks adjust to geopolitical shocks and times of increased policy uncertainty.

Categorisation

The Report categorises geopolitical risks into five groups: military conflicts and wars / infrastructure vulnerabilities, including energy and digital systems / trade disruptions and sanctions / capital and financial risks / political or societal factors. The Report identifies the key transmission channels through which these risks affect financial stability, being financial, the real economy and operational. The Report highlights that it is focused on the financial channel, further highlighting that “spillbacks” occur through tighter financial conditions, higher risk premia, and financial market stress. This can result in financial institutions facing heightened credit market, liquidity, or operational risks.

Findings

Some of the main findings identified by the Report are as follows:

• the prevailing geopolitical risks have increased in recent years, as evidenced by trends in geoeconomic fragmentation, geopolitical tensions and heightened policy uncertainty. At the same time, financial market volatility has remained contained or short lived;
• heightened geopolitical shocks and policy uncertainty tends to raise systemic stress, resulting in lower loan growth and tighter lending conditions. The Report notes that these results point to significant tail risks for the real economy from geopolitical sources;
• the transmission of geopolitical risks and economic policy uncertainty varies notably across EU member states, reflecting differing levels of risk exposures and financial sector resilience, with the Report highlighting that more open economies and those with higher public debt ratios tend to be more vulnerable to amplification effects; and
• both banks and non-banks adjust their behaviour in response to geopolitical shocks by reducing lending, especially across borders. In this regard, the Report highlights that, although this reduces the exposure of the financial system to external shocks, it also has the effect of limiting international diversification.

Next Steps

The ECB and the ESRB have stated that the insights in the Report can enable policymakers and financial institutions to better detect and evaluate geopolitical risks for the financial sector and to calibrate macroprudential policy responses.

1. AMLA plan to carry out data collection exercise to test risk assessment models for financial sector

On 26 January 2026, the Anti Money Laundering Authority (“AMLA”) issued a press release (“Press Release”) stating that, in March 2026, it will carry out a data collection exercise (“Exercise”) to test and calibrate its risk assessment models for the financial sector.

The Press Release explains that the risk assessment models have two purposes:

• to inform the selection of up to 40 entities that will be directly supervised by the AMLA from 2028. This selection is due to take place in 2027; and
• to ensure that money laundering risks as regards financial institutions are consistently assessed by supervisors across the EU.

The Press Release highlights that the Exercise is being carried out in close cooperation with national supervisors and the private sector. The Exercise will involve two groups of financial institutions, as follows:

• those that will be eligible for direct supervision by the AMLA; and
• a representative sample of entities that will likely remain subject to national supervision.

Lists containing details as to both groups have been provided to the AMLA by national supervisors and the AMLA has notified supervisors as to those selected to participate in the Exercise.

The AMLA will use the insights gained from the Exercise to optimise the data collection planned in light of the selection process for direct supervision. Also, the exercise will allow participating financial institutions to test and prepare their systems for future data collections.

Next Steps

The AMLA has stated that once the models have been fully tested and calibrated, the final list of entities eligible for direct supervision will be decided upon. After this, national supervisors will collect data points from the identified entities in early 2027. This will, in turn, inform the AMLA’s subsequent selection of the 40 directly supervised entities.

The AMLA also published an ‘Explainer’, containing details as to the selection process for direct supervision.

2. EBA updates RTS to streamline resolution planning and strengthen cooperation in resolution colleges

On 23 January 2026, the European Banking Authority (“EBA”) published its final report (“Report”) on draft regulatory technical standards (“RTS”) on the content of resolution plans and group resolution plans, the assessment of resolvability, and the operational functioning of resolution colleges under the Bank Recovery and Resolution Directive (“BRRD”).

The EBA consulted on the draft RTS in August 2025, with the Report noting that there were no material changes to the draft RTS as a result of feedback received from stakeholders.

The Report explains that the EBA decided to update the existing RTS, which were adopted by the European Commission (“Commission”) in July 2016, to take account of:

• over ten years of experience in resolution planning and implementation; and
• lessons learned from recent crisis scenarios and simulation exercises.

The updates to the RTS address the structure and content of resolution plans together with the operational functioning of resolution colleges for cross-border groups. The Report highlights that the purpose of the updated RTS is to simplify, streamline and enhance the usability of resolution plans / improve resolvability assessments / simplify the functioning of resolution colleges / strengthen cooperation among resolution authorities.

RTS on resolution plans and resolvability assessments

The Report highlights how resolution plans have become longer and more detailed over time, often resulting in duplications and overlaps. Further, some resolution plans limit the ability to adapt to the scenarios that might ultimately materialise. With that in mind, the EBA has made changes to these RTS, some of which are as follows:

• the structure of the plan is better rationalised to follow the logical sequence of the resolution planning process;
• the content of the plan is also better specified, to focus on the information that is directly relevant for the institution or group concerned and on the key elements necessary for the implementation of the strategy;
• there is now a clearer split between authorities’ strategy selection and the assessment of institutions’ resolvability, which will allow for more targeted and efficient plan updates; and
• a reorganised resolvability assessment structured around seven core dimensions to ensure greater consistency and effectiveness across the EU.

RTS on resolution colleges

The Report explains that these updates to the RTS aim to simplify processes, improve cooperation and information exchange among authorities and improve effective coordination in the implementation of the resolution scheme. In that regard, some of the main changes are as follows:

• the number of steps required to reach joint decisions has been reduced;
• clarification of operational procedures when an emergency situation occurs such that the resolution college will be able to cooperate at an early stage as soon as problems emerge; and
• the efficiency of college procedures has been further simplified by excluding colleges for certain groups from some requirements. This is aimed at achieving proportionality.

Next Steps

The draft RTS will be forwarded to the Commission for endorsement. After this the draft RTS will be scrutinised by the European Parliament and the European Council, in advance of publication in the official journal of the EU.