Introduction to Credit Institution

Banking Supervision within the Central Bank of Ireland consists of three separate, but inter-dependent Divisions comprising of

  • BSSD    Banking Supervision –Supervision Division
  • BSID     Banking Supervision –Inspections Division
  • BSAD   Banking Supervision – Analysis Division

Background

Historically the Central Bank of Ireland has had overall responsibility for the authorisation and supervision of credit institutions operating in Ireland. As a result of the commencement of the Single Supervisory Mechanism (“SSM”) on 4 November 2014, the European Central Bank became the competent authority for banking supervision.

This development has resulted in a number of fundamental changes on how supervision is conducted.  The SSM is built on collaboration between the ECB and the National Competent Authorities (NCAs) within each member state, such that resources from both the ECB and the NCAs work together to deliver on the SSM’s supervisory responsibilities

The current Supervisory Framework

With the introduction of the SSM, the ECB became the competent authority for the supervision of credit institutions in Ireland.

Significant Institutions (“Sis”) are supervised directly by the ECB and are no longer supervised for prudential purposes though the Central Bank Framework for supervision called PRISM (Probability Risk and Impact System) but rather through the ECBs equivalent Framework.

In the case of less-significant institutions, the Central Bank of Ireland supervises them directly, while the ECB supervises them indirectly. In these cases, the ECB, which has ultimate responsibility for the functioning of the SSM, may issue guidelines to ensure consistent supervision or even take over the direct supervision of an institution if it considers it necessary.

The Central Bank of Ireland remain competent authority for Anti Money laundering for SIs and LSIs, monitoring compliance with the Criminal Justice Act through our specifically focused Anti Money Laundering Division.

The Central Bank will also continue to be solely responsible for conduct supervision for SI and LSI institutions through our Consumer Division.

The Structure of Banking Supervision comprises of

On-going Supervision (Supervision Division – BSSD)

Consists of supervision teams for both SIs and LSIs and is split into two areas. One area focuses on the supervision of large domestically focused retail credit institutions (all SIs) operating in Ireland and the other focuses on the supervision of the generally more internationally focused smaller credit institutions (subsidiaries of SIs, LSIs and Branches).

On-site Inspections (Inspections Division – BSID)

The mandate of BSID is to carry out inspections as requested by the ECB (SIs) or the Central Bank (LSIs).

A specialist horizontal function (Analysis Division – BSAD)

BSAD provides support and guidance to the other two Divisions in their supervision of credit institutions via the provision of, inter alia, the following services: providing expert input on the areas of Internal Models, Crisis Management, Regulatory Reporting and Analytics, stress testing, and Authorisation requests.