Strategic Role of the Central Bank

Primary Objectives

The Central Bank’s primary objectives have been set out in legislation. Its Strategic Responsibilities as outlined below are aligned to these objectives. 

Strategic Responsibilities

Eurosystem Effectiveness and Price Stability

The Central Bank is responsible for contributing to the formulation of Eurosystem monetary policy and helping to ensure that the Euro area inflation objective is achieved. It supports the Governor in his role as a member of the Governing Council of the European Central Bank (ECB). The primary objective of the ECB’s monetary policy is to maintain price stability. In this pursuit, the ECB aims to maintain inflation rates below, but close to, 2% over the medium term. Read more in our Monetary Policy section.

Stability of the Financial System

The Central Bank has an explicit mandate in domestic and European legislation to contribute to financial stability in Ireland and at euro area and EU levels. It does so by enhancing the macro-prudential policy framework by further developing a suite of indicators to assess systemic risks, developing macro-prudential tools to address emerging risks, conducting analytical research to inform on the calibration of these tools, and evaluating the effectiveness of these tools in limiting systemic risk.

The Central Bank is also mandated to establish and operate a Central Credit Register which will document loans to individuals and businesses. This will enhance the Central Bank’s insight into credit information. When operational, all lenders will be required to submit personal and credit information on loan agreements of €500 or more to the Register. Read more in our Financial Stability section.

Protection of Consumer of Financial Services

As the regulator of financial service providers and markets in Ireland, the Central Bank has to ensure that the best interests of consumers are protected. The Central Bank works to develop a positive consumer focused culture within regulated firms, ensuring the consumer protection framework remains effective by reviewing, developing and enhancing the protections in place and by influencing and shaping European and international developments, and monitoring and enforcing compliance with the required standards through themed reviews and inspections. Find out more in our Consumer Protection and Consumer Hub sections.

Regulation of Financial Institutions and Enforcement Actions

The Central Bank aims to ensure that regulated firms are financially sound and safely managed. Regulation of financial institutions and markets is undertaken through risk-based supervision, which is underpinned by credible enforcement deterrents. This mandate is delivered through a range of tools which include supervising banks within the Single Supervisory Mechanism framework, monitoring of regulatory returns filed with the Central Bank, approval of persons under the fitness and probity standards, and taking enforcement actions when necessary. The Central Bank aims to take a proportionate approach to its actions as an intrusive and assertive regulator and does not seek to ensure a ‘zero-failure’ system of regulation and supervision, but to safeguard that any firms that fail, do so in a way that avoids significant disruption to financial services or consumers. Find out more about how and who we regulate and visit our Regulation section.

Regulatory Policy Development

A high quality and effective regulatory framework is essential in requiring financial firms to operate to high standards as it provides the basis for supervising and enforcing the key principles of organisational and financial soundness, consumer protection, and effectively functioning markets.

The Central Bank engages actively in the European regulatory policy process, contributing to the development of sound rules well adapted to the Irish context and supporting the work to transpose those rules into Irish law and provide the framework for their application to Irish financial firms and markets.

Efficient and Effective Payment and Settlement Systems and Currency Services

The Central Bank, in conjunction with the ECB and other national competent authorities, is responsible for ensuring that payment, settlement, and currency systems are safe, resilient and efficient and that access to such systems is not restricted. The Central Bank also ensures the provision of banknotes and coins and other related currency services to the public, a key component of payments systems. Find out more in our Payments Systems and Currency section.

Independent Economic Advice and High Quality Financial Statistics

The Central Bank aims to ensure that its economic advice is forward looking and independent and that statistics are robust and relevant. To achieve this, the Central Bank undertakes data collection, statistical analysis, economic analysis and research designed to inform economic policy making domestically and at the euro area level. The analytical and statistical outputs are disseminated through various publications, seminars and through ongoing interactions with government departments, academia and commentators. Find out more in our Publications and Statistics sections.

Recovery and Resolution of Financial Institutions

The Central Bank aims to develop a robust framework is in place to ensure that failed or failing regulated firms go through an orderly resolution. The Central Bank requires all banks and investment firms within scope to prepare recovery plans, which set down the measures they would adopt in the event of their financial deterioration. The Central Bank then puts feasible and credible resolution plans in place for those firms.