Consultation and Feedback

In November 2023, the Central Bank of Ireland published a consultation paper (CP157) on codifying, and in certain cases augmenting, the yield buffer supervisory expectation for Irish authorised GBP-denominated liability driven investment (LDI) funds.  The proposals in CP157 aim to strengthen the steady-state resilience of Irish authorised GBP denominated LDI funds. The yield buffer achieves this aim by limiting the leverage that a fund can employ, contingent upon the interest rate sensitivity of its assets.

The Central Bank of Ireland public consultation process was undertaken in parallel with the Commission de Surveillance du Secteur Financier (CSSF), Luxembourg’s National Competent Authority (NCA). This follows the joint approach both authorities took in responding to the initial crisis in the November 2022 letter. Owing to the aligned consultation process, the feedback statement to CP157 also makes reference to feedback received by the CSSF to their consultation paper. Therefore, it is recommended that this Feedback Statement is read in conjunction to the feedback published by the CSSF.

In November 2023, stakeholders were invited to provide feedback on the proposals outlined in CP157. The consultation period for CP157 ran from 23 November 2023 to the 18 January 2024. Seven responses were received from stakeholders, mostly from Alternative Investment Fund Managers (AIFMs), a representative body, and a member of public.

The Central Bank of Ireland would like to thank all stakeholders who took the time to make a submission on CP157. The insights provided by the feedback have fed-into the Central Bank of Ireland’s deliberations around the calibration and implementation of the proposed measures.

The final policy proposals for Irish-authorised GBP-denominated LDI funds take account of the considerable feedback received from CP157 and further analysis conducted by the Central Bank of Ireland. Details on the response of the Central Bank of Ireland are available in the “ Feedback Statement CP157: Macroprudential measures for GBP liability driven investment funds”.