Funding the Cost of Financial Regulation

14 June 2019 Press Release

Central Bank of Ireland

  • The Central Bank is issuing guidance on the path towards financial services firms paying 100 per cent of the costs of financial services regulation and supervision
  • Approach has been agreed with the Department of Finance and is based on a “user pays” principle to reduce and ultimately eliminate the taxpayer paying some of the costs of financial regulation
  • In the future, levies will be based on incurred costs, so the 2019 levies will issue in 2020

Every year the Central Bank of Ireland makes regulations to levy industry to fund a proportion of the cost of financial regulation (“the levy”). The Central Bank is providing early notice to industry on how these costs will be funded in the coming years.

Since 2015, following a public consultation, the financial services industry has moved from paying approximately half of the costs of financial regulation to paying approximately two-thirds of these costs for 2018.

Today, the Central Bank, with approval from the Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD, is publishing the expected path towards 100% industry funding over the next five years.

Over the same period, the Central Bank will continue to enhance the transparency and predictability of the levy. The move to levying on an incurred cost basis is an important step in this continuous improvement. 

Ed Sibley, Deputy Governor Prudential Regulation, said: “The Central Bank is committed to serving the public interest by safeguarding monetary and financial stability and by working to ensure that the financial system operates in the best interests of consumers and the wider economy. An effective financial regulation framework, underpinned by supervisory and enforcement frameworks, is essential in fostering a resilient financial system and protecting consumers.

"Today, we have set out our plans to move, with some limited exceptions, to full industry funding over the next five years. This is based on the principle that the regulated financial services firms operating in and out of Ireland should pay the regulatory costs. 

“We are aware that the increase in recovery rates, combined with increases in the cost of regulation over recent years, have led to levy increases. The increase in costs has resulted from changes in our supervisory mandate, the growth of the Irish financial services industry arising from Brexit and the unwinding of FEMPI. In the Central Bank’s Strategic Plan 2019-2021 we anticipated further limited growth to address Brexit and the strengthening of financial conduct regulation. We are committed to stabilising staff numbers and costs to ensure our long-term financial independence and to limit the rate of future increases in levies on regulated firms.”

Further information is available in the Statement on Funding the cost of Financial Regulation.


The Department of Finance and Central Bank undertook a joint public consultation on ‘Funding the cost of Financial Regulation’.

FEMPI is the Financial Emergency Measures in Public Interests legislation.

Exceptions to the 50:50 funding arrangements which existed prior to 2015 are as follows:

  • Credit Institutions that participated in the Eligible Liabilities Guarantee Scheme 2009 are already required to fund 100% of supervisory costs.
  • The levies for credit unions are currently capped at 0.01% of total assets as at 30 September in the previous year. As a result, the credit union sector currently funds approximately 9% of the cost of their regulation.

The Central Bank publishes an Annual Performance Statement, which provides details on its regulatory agenda and related costs.

Further information is available at Industry Funding Levy.