Reciprocity  

Given the highly integrated nature of the EU financial sector, reciprocity is an essential element of the macro-prudential framework. Reciprocity aims to increase the effectiveness of macro-prudential measures by reducing cross-border leakages and by minimising negative cross-border effects. In the absence of reciprocity, leakages could arise as institutions providing cross-border services, either directly or through branches, are not covered by national measures.

What does this mean?

When a country introduces a national macro-prudential policy measure which may have cross-border effects, reciprocity requires other countries to apply an equivalent measure to domestically-authorised institutions in order to minimise regulatory leakage and cross-border effects. Currently, all EU Member State or relevant non-Member State requests for reciprocation are sent to the ESRB, which assesses the requests and issues subsequent recommendations to relevant authorities regarding reciprocity for particular measures. Following an appropriate internal assessment, the Central Bank of Ireland (hereafter ‘Central Bank’) may comply with the recommendation from the ESRB to reciprocate the measures taken.

Relevant Documents

Central Bank Macro-Financial Review, May 2016 - Reciprocity - Box 7 | pdf 1560 KB ESRB recommendation on the assessment of cross-border effects of and voluntary reciprocity for macro-prudential policy measures - ESRB/2015/2 | pdf 104 KB Recommendation of 24 March 2016 amending Recommendation ESRB/2015/2 on the assessment of cross-border effects of and voluntary reciprocity for macro-prudential policy measures - ESRB/2016/3 | pdf 376 KB ESRB recommendation on recognising and setting countercyclical buffer rates for exposures to third countries - ESRB/2015/1 | pdf 102 KB

List of measures reciprocated by the Central Bank following an ESRB recommendation under ESRB/2015/2

This list of measures refers only to voluntary reciprocity of measures by the Central Bank following an ESRB recommendation under ESRB/2015/2 (as amended by ESRB/2016/3). This list does not refer to measures which are subject to mandatory reciprocity under the CRD IV / CRR framework, including but not limited to Articles 124(5) and 164(7) of Regulation (EU) No 575/2013 which impose requirements directly on institutions.

There are currently no measures subject to voluntary reciprocity by the Central Bank. 

List of the following countercyclical buffer (CCyB) rates recognised by the Central Bank:

• Rates in excess of 2.5 per cent set in another Member State
• Rates set in a third country where recognition follows a recommendation under ESRB/2015/1

This list of measures refers only to the discretionary recognition of CCyB rates by the Central Bank. This list does not include rates recognised under the framework of mandatory recognition of CCyB rates set by the designated authorities of other European Member States under the CRD IV / CRR legislative framework, including the European Union (Capital Requirements) Regulations 2014 (S.I. 158/2014).

There are currently no Member State rates in excess of 2.5 per cent voluntarily recognised by the Central Bank.

There are currently no third country CCyB rates subject to voluntary recognition by the Central Bank.