Credit Institutions Resolution Fund (CIRF)

What is the CIRF?

This resolution fund was set up to provide a source of funding for the resolution of financial instability in, or an imminent serious threat to the financial stability of, an authorised credit institution.

Section 15(1) of the Central Bank and Credit Institutions (Resolution) Act, 2011 provides for the making of regulations by the Minister for Finance for the purpose of the payment of levies to the CIRF by authorised credit institutions.

The Minister for Finance has made regulations providing for contributions by authorised credit institutions to the CIRF, namely the  Credit Institutions Resolution Fund Levy Regulations 2012 (as amended) (2012 Regulations) (S.I. No. 381/2012) The 2012 Regulations specify the levy period and the basis for determining the levy amount. The 2012 Regulations are updated on an annual basis.

Who is liable to pay?

The 2012 Regulations (as updated by the 2017 Regulations) require:

  • Every entity that, on 1 October  is an authorised credit institution to pay a levy to the Central Bank for the account of the Resolution Fund.
  • However, since 1 January 2016, banks are required to contribute to the Single Resolution Fund (SRF) and consequently only credit unions are now required to contribute to the CIRF.

How will the levy be calculated?

The amount of levy payable by an authorised credit institution is calculated by applying the multiplier set out in column (3) of the Schedule to the 2012 Regulations for the relevant category of authorised credit institution.

What happens next?

  • The Central Bank will notify each credit institution of the amount of the levy payable to the CIRF based on returns previously submitted to the Central Bank.
  • As outlined above, however, the basis for levy calculation is set out in column (3) of the Schedule to the 2012 Regulations and individual credit institutions are responsible for the remittance of the correct amount to the Central Bank.
  • Each credit institution is, therefore, advised to review the levy notice in conjunction with the Levy Regulations, ensure that the amount of the levy has been calculated correctly and make arrangements to remit the relevant amount to the Central Bank.