STRATEGIC PLAN 2019-2021 - CENTRAL BANK OF IRELAND
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CENTRAL BANK OF IRELAND
STRATEGIC PLAN
2019–2021
»
CONTENTS
CENTRAL BANK OF IRELAND
STRATEGIC PLAN
2019–2021
Foreword 3
PART ONE
Mission, Mandate and Vision 8
Strategic Themes 12
PART TWO
Review of Strategy 2016–2018 19
Statutory Objectives 21
Organisational Objectives 31
» »
~ STRATEGIC PLAN 2019-2021
CONTENTS Foreword Mission, Mandate Strategic Review of Strategy Statutory Organisational
and Vision Themes 2016–2018 Objectives Objectives
Foreword
“We will be flexible in the delivery of our
strategy, effectively prioritising across competing
demands, while safeguarding delivery of our
fundamental work, and responding to changes
in the external environment.”
» Governor Philip R. Lane »
CENTRAL BANK OF IRELAND 3~ STRATEGIC PLAN 2019-2021
CONTENTS Foreword Mission, Mandate Strategic Review of Strategy Statutory Organisational
and Vision Themes 2016–2018 Objectives Objectives
Foreword
A decade after the onset of the financial crisis in There has been a shift to a more intrusive
autumn 2008, it is timely to review the strategic supervisory philosophy, a commitment to
direction of the Central Bank of Ireland (Central resolving troubled financial institutions (rather
Bank). Internationally, the crisis triggered than turning to the taxpayer), as well as the
widespread policy reforms, with central banking activation of macro-prudential policy measures
and financial regulatory mandates expanded to that seek to contain systemic risk. There has Governor Philip R. Lane
redress the systemic flaws revealed by the crisis. also been an elevation in concern about
Domestically, the post-crisis legacy of excessive financial misconduct.
indebtedness has warranted careful management
We have witnessed the adoption of of the 2016-2018 Strategic Plan, the workforce
and oversight, together with an extensive
unconventional monetary policy measures and the of the Central Bank has expanded by 27 per cent
restructuring of the financial system. Especially
increase in the collection of financial data, which (from approximately 1500 to 1900). In 2017, our
over the last five years (since the completion of
has required a transformation in central banks and city centre staff moved to our new Dockland
the EU-IMF programme in 2013), a primary
financial regulators to meet these challenges. This Campus, comprising the new headquarters on
objective has been to establish the Central Bank
is being achieved through a combination of North Wall Quay and our Spencer Dock location.
as the effective steward of the Irish financial
increased staffing levels, changing work practices In addition, there has been considerable
system, working in the public interest and in
and strengthening the organisational capability. investment in IT capabilities and in improving
partnership with the other branches of the Irish
In banking, the initiation of the Single Supervisory skill levels among our staff.
State and our colleagues in the Eurosystem and
Mechanism in 2014 has led to a fundamental shift,
the European System of Financial Supervision.
with the supervision of major banks led by the
The remarkable recovery in the Irish economy European Central Bank (ECB), in partnership with
has been accompanied by a parallel improvement the national competent authorities.
“A decade after the onset of the
in the health of the domestically-orientated part
In Ireland, the ongoing legacy problems from the financial crisis in autumn 2008,
of the Irish financial system. At the same time,
crisis and our prominence as an international
Ireland’s role as a location for international it is timely to review the strategic
financial centre has meant that the required
financial intermediation across a broad range of direction of the Central Bank
transformation of the Central Bank has been
financial services has continued to expand.
» especially striking. As a result, over the course of Ireland.” »
CENTRAL BANK OF IRELAND 4~ STRATEGIC PLAN 2019-2021
CONTENTS Foreword Mission, Mandate Strategic Review of Strategy Statutory Organisational
and Vision Themes 2016–2018 Objectives Objectives
Looking to the next three-year planning cycle, we the policy framework is a primary strategic
are entering a period of consolidation. With the priority for 2019-2021, there are two significant
implementation of the international and challenges that call for particular strategic focus:
European regulatory reforms that were
• One is Brexit. While, at the time of preparation
introduced over the last decade, there is a new
of this Strategic Plan, the final nature of the
and more robust framework guiding financial Governor Philip R. Lane
new EU-UK arrangements remain unclear,
supervision. The recovery of the Irish and
Brexit has short-term and long-term
European economies is facilitating a gradual
implications for the structure of the Irish
normalisation in financial conditions and an
economy and the trading system. In addition, “The primary challenge for this next
improvement in the health of the balance sheets
Brexit is inducing a significant expansion in the phase is to ensure that the new policy
of financial institutions and households, firms and
set of firms looking to use Ireland as a base to
governments. However, some challenges and risks framework delivers on its potential
serve the EU27 financial system and it is
from the crisis remain and Ireland continues to be by safeguarding monetary and
forcing a rethink of the appropriate framework
exposed to risks both in the domestic economy
and the external environment. While the
for regulating trade in financial services financial stability”
between the EU27 and other locations
structure of the financial industry may face
(including the UK). The successful handling of
considerable disruption due to the emergence of
the impact of Brexit across our central banking It is our strategic commitment to elevate the
new technologies, the general nature of the
and regulatory mandates is a high strategic regulation of the behaviour of regulated firms1
underlying regulatory framework means that it
priority for the Central Bank. and the operation of financial markets in order to
can be applied in similar manner to new entrants
protect consumers and investors. We are also
and established firms alike. • The other is the implementation of a new
gearing up to expand the scope of financial conduct
approach to financial conduct regulation.
The primary challenge for this next phase is to regulation, with the Brexit-related expansion of
The last decade has seen a wide range of
ensure that the new policy framework delivers by wholesale financial trade requiring a parallel
financial misconduct scandals around the world,
safeguarding monetary and financial stability, investment in wholesale conduct regulation.
while the Tracker Mortgage Examination has
while working to ensure that the financial system
revealed the damage that can be caused to Irish
operates in the best interests of consumers and
» the wider economy. While the consolidation of
consumers from misconduct by domestic banks. 1. Regulated firms include all entities and individuals regulated »
by the Central Bank of Ireland.
CENTRAL BANK OF IRELAND 5~ STRATEGIC PLAN 2019-2021
CONTENTS Foreword Mission, Mandate Strategic Review of Strategy Statutory Organisational
and Vision Themes 2016–2018 Objectives Objectives
Importantly, we recognise that prudential and As a consequence, we will be flexible in the
conduct regulation are intertwined. Financially delivery of our strategy, effectively prioritising
unsound firms pose grave threats to consumers across competing demands, while safeguarding
and investors. In a similar vein, we recognise that delivery of our fundamental work, and
macro-financial stability and conduct regulation responding to changes in the external
are intertwined: the Irish public is well aware that environment. This will necessitate taking Governor Philip R. Lane
systemic instability is deeply damaging for risk-based decisions, as we will never have
consumers and investors. It is important enough people for all the work we would wish
therefore that we operate as One Bank by to do; and we will need to build capabilities
working closely together across the organisation and skills. I would like to take this opportunity
“It is important that we operate as
to deal with the risks and challenges we face in to recognise the dedication and commitment One Bank by working closely together
delivering on our mandate. of our staff whose continuing work to across the organisation to deal with
deliver on our mandate is crucial to the the risks and challenges we face in
The corollary to the consolidation of the Central
successful implementation of the
Bank’s development will be greater stability in delivering on our mandate.”
Strategic Plan.
the overall operational budget and staffing. While
Brexit and the expansion of financial conduct In this Strategic Plan, you will learn more about
regulation will necessitate a limited net expansion our Vision and thematic priorities for the next
in staff numbers, new tasks and emerging three years. The Strategic Plan is arranged in two
priorities will primarily require redeployment of parts. The first part sets out the high-level
current staff and de-prioritisation of some strategy for the Central Bank and includes the
existing tasks. In parallel, non-pay operational Mission, Vision and strategic themes. These
expenditure will be tightly controlled. The themes are closely linked to our Mission and
stabilisation of the operational budget is essential Vision and will collectively contribute to the
for the long-term financial independence of the delivery of our wider objectives. The second part
Central Bank, while also limiting the long-term outlines the strategic priorities under each of our
rate of increase in the levies imposed on statutory objectives as well as our key
» regulated firms. organisational objectives. »
CENTRAL BANK OF IRELAND 6CONTENTS
CENTRAL BANK OF IRELAND
STRATEGIC PLAN
2019-2021
PART ONE
» »
CENTRAL BANK OF IRELAND 7~ STRATEGIC PLAN 2019-2021
CONTENTS Foreword Mission, Mandate Strategic Review of Strategy Statutory Organisational
and Vision Themes 2016–2018 Objectives Objectives
Mission
The Central Bank of Ireland serves 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.
The Central Bank plays an important role in Irish
society and we recognise the need for us to
deliver on our mandate in the most effective way
possible. The role and responsibilities of the
Central Bank have increased over the years since
our establishment in 1943. Serving the public
interest has always been at the core of our work
and is reflected in our Mission Statement. In
addition, our Mission Statement recognises the
important role that the Central Bank plays in
safeguarding stability and in ensuring that the
financial system is working in the interests of
consumers and the wider economy.
» »
CENTRAL BANK OF IRELAND 8~ STRATEGIC PLAN 2019-2021
CONTENTS Foreword Mission, Mandate Strategic Review of Strategy Statutory Organisational
and Vision Themes 2016–2018 Objectives Objectives
Mandate
In discharging its functions and exercising its powers as part of
the European System of Central Banks, the primary objective
of the Central Bank is to maintain price stability.
The Central Bank also has the following statutory objectives:
The discharge of such
other functions and
Price Financial Resolution Financial Payments, Economic powers conferred on
Stability Stability Regulation Settlements Analysis the Central Bank by
and Currency and Statistics law including:
As part of the The stability of The resolution of The proper and effective The efficient and The provision of The operation of
European System the financial financial difficulties regulation of financial effective operation analysis and comment the Central Credit
of Central Banks, system overall. in credit institutions, service providers and of payment and to support national Register, the Deposit
the primary objective certain investment markets, while ensuring settlement systems. economic policy Guarantee Scheme
of the Central Bank firms and credit unions. that the best interests of development. and the Insurance
is to maintain consumers of financial Compensation Fund.
price stability. services are protected.
» »
Further information on who we are and what we do is available on our website www.centralbank.ie.
CENTRAL BANK OF IRELAND 9~ STRATEGIC PLAN 2019-2021
CONTENTS Foreword Mission, Mandate Strategic Review of Strategy Statutory Organisational
and Vision Themes 2016–2018 Objectives Objectives
Vision
We are committed to being an independent, forthright and influential
organisation with a compelling, clear and challenging vision of being:
One Bank: Trusted by the Public, Respected by our
Peers, and a Fulfilling Workplace for our People.
Trusted by Respected Fulfilling Workplace
the Public by our Peers for our People
A trusted organisation Regarded by our peers Where our people are
that is working towards at home and abroad as committed to excellence in
the public good in a credible and working the delivery of our mandate,
transparent, effective constructively to help have the opportunity to
and accountable way. influence and shape the build fulfilling careers and
best outcomes for the reach their potential, and feel
public good. valued in an environment
that supports diversity and
inclusion.
» »
CENTRAL BANK OF IRELAND 10~ STRATEGIC PLAN 2019-2021
CONTENTS Foreword Mission, Mandate Strategic Review of Strategy Statutory Organisational
and Vision Themes 2016–2018 Objectives Objectives
Three-Year Strategic Plan
Under Section 32B of the Central Bank Act 1942, • a growing economy, with a labour market In developing this Strategic Plan, we carried out
the Central Bank is required to produce a approaching full employment that is subject a comprehensive review of our current strategy
strategic plan every three years. Based on our to significant downside risks; as well as assessing the emerging risks and
Mission, Mandate, and Vision, the Central Bank challenges to successful delivery of our mandate.
• a more sound financial system, where new
prepares the Strategic Plan, which sets out our We also engaged with the public, the Consumer
types of risks are emerging, associated with
future priorities, activities and desired outcomes Advisory Group2 and internally across the Central
financial innovation, technology, cyber and
under each of our objectives. The development of Bank to inform the direction of the strategy.
Brexit;
our Strategic Plan helps identify the key longer-
In this Strategic Plan, we have identified
term priorities critical to the successful delivery • a regulatory environment that has undergone
5
of our objectives and guides our work over each significant reform and which is entering a
three-year period. These priorities are period of consolidation, where there will be a
underpinned by the effective delivery of our
activities across the organisation.
greater focus on the culture and behaviour of
firms and those who run them, as well as
STRATEGIC
This Strategic Plan covers the period 2019-2021
dealing with the impact of the move to digital THEMES
and other technologies in the provision of
and builds on the current strategy with many of
financial services;
the current priorities and initiatives continuing to
feature over the next three years. The Strategic • the importance of independent public sector
Plan is reviewed annually and an update on bodies being open, transparent and that will be critical to the successful
progress is published in our Annual Report. accountable. delivery of our mandate.
The broad context in which this Strategic Plan has
been developed includes: In delivering the key actions under these themes, we are committed to working
closely together and supporting each other across the whole organisation as
One Bank to ensure effective delivery of our desired outcomes.
» 2. The Consumer Advisory Group was established under the Central Bank Reform Act 2010 and advises the Central Bank on the
»
performance of its functions and the exercise of its powers in relation to consumers of financial services.
CENTRAL BANK OF IRELAND 11~ STRATEGIC PLAN 2019-2021
CONTENTS Foreword Mission, Mandate Strategic Review of Strategy Statutory Organisational
and Vision Themes 2016–2018 Objectives Objectives
5
Strengthening Engaging and Enhancing
Strategic Themes
Brexit Strengthening
Resilience Consumer Influencing Organisational
Protection Capability
Enhancing
Strengthening
Organisational
Resilience
Capability
The financial system is
better able to withstand
Strengthening Our culture, resources
external shocks and Consumer Protection and capabilities support
the effective and
future crises.
The best interests of consumers efficient delivery of our
are protected and confidence and mandate whilst
trust in the financial system is maintaining the highest
enhanced through effective standards of governance
Brexit
regulation of firms and markets. and risk management.
The risks posed to the economy,
financial system, regulatory
environment and consumer
STRATEGIC Engaging and Influencing
protection by the impact of Brexit THEMES
are mitigated. We engage with and listen to the
public and stakeholders to inform our
work and help build trust in, and
understanding of, the Central Bank.
We strategically influence and shape
key decisions and policies in Europe
» and internationally. »
CENTRAL BANK OF IRELAND 12~ STRATEGIC PLAN 2019-2021
CONTENTS Foreword Mission, Mandate Strategic Review of Strategy Statutory Organisational
and Vision Themes 2016–2018 Objectives Objectives
~
Strengthening Brexit Strengthening Engaging and Enhancing
Strategic Theme: Resilience Consumer Influencing Organisational
Strengthening Protection Capability
Resilience
Desired Outcome: The financial system is better able to withstand external shocks and future crises.
The economy, financial system and domestic We will do this by:
banking sector are all now in a stronger position
• Monitoring closely the threats to financial • Enhancing our financial crisis preparedness
of recovery and growth. Notwithstanding these
stability and calibrating macro-prudential and management capability.
positive developments in recent years,
policy tools, including countercyclical capital
challenges remain. In addition, Ireland is • Preparing for and managing the failure of
buffers and mortgage measures, as necessary,
exposed to risks emerging both in the domestic relevant regulated firms in an orderly fashion
to maintain stability.
economy and in the external environment. It is to ensure minimum disruption to financial
important to further strengthen resilience and • Delivering effective supervision of firms and stability, the economy and consumers, while
mitigate risks in the financial system so that it markets that can pose a threat to financial working closely with the Single Resolution
can better withstand future shocks and crises stability to ensure they are well managed and Board for firms within their remit.
and that the impact of these events is mitigated. financially sound.
• Continuing to address existing vulnerabilities
and weaknesses remaining from the financial
crisis, particularly relating to mortgage arrears
and non-performing loans.
» »
CENTRAL BANK OF IRELAND 13~ STRATEGIC PLAN 2019-2021
CONTENTS Foreword Mission, Mandate Strategic Review of Strategy Statutory Organisational
and Vision Themes 2016–2018 Objectives Objectives
~
Strengthening Brexit Strengthening Engaging and Enhancing
Strategic Theme: Resilience Consumer Influencing Organisational
Brexit Protection Capability
Desired Outcome: The risks posed to the economy, financial system, regulatory environment and
consumer protection by the impact of Brexit are mitigated.
Brexit presents one of the most significant We will do this by: • Ensuring that regulated firms are
challenges for Ireland with risks posed to the appropriately prepared for the full range of
• Continuing to conduct research and evidence-
economy, financial system, regulatory Brexit scenarios and are safeguarding the
based analysis of the potential risks arising
environment and the protection of consumers. interests of their customers.
from Brexit and effectively communicating the
Dealing with the immediate and longer-term
findings to key stakeholders and policy makers. • Ensuring a robust and effective authorisation
impacts of Brexit will continue to be one of our
process of all firms seeking authorisation,
key priorities. We will also need to continue to • Enhancing our regulatory tools and
including those as a result of Brexit.
engage in the ongoing development of the single supervisory approaches to ensure that the
market in financial services post Brexit. We will wider financial stability, market and conduct
work closely together across our Central risks associated with the increased nature,
Banking, Prudential Regulation and Financial scale and complexity of the Irish financial
Conduct Pillars to monitor and manage the system are understood and effectively
broad spectrum of risks posed by Brexit. mitigated.
» »
CENTRAL BANK OF IRELAND 14~ STRATEGIC PLAN 2019-2021
CONTENTS Foreword Mission, Mandate Strategic Review of Strategy Statutory Organisational
and Vision Themes 2016–2018 Objectives Objectives
~
Strengthening Brexit Strengthening Engaging and Enhancing
Strategic Theme: Resilience Consumer Influencing Organisational
Strengthening Protection Capability
Consumer Protection
Desired Outcome: The best interests of consumers are protected and confidence and trust in the
financial system is enhanced through effective regulation of firms and markets.
Ensuring the best interests of consumers and We will do this by: that deliver fair outcomes for consumers,
investors are protected is a fundamental part of advocating for further strengthening of
• Strengthening our approach to conduct risk
the Central Bank’s Mission. Embedding a standards and individual accountability, and
regulation, setting our expectations, and
consumer-focused culture within firms is taking action where these standards are not
challenging the firms and markets that we
essential to ensuring they serve the interests and being met. We will complete supervisory reviews
supervise by requiring them to have in place a
needs of consumers. It is important that of governance and risk management cultures in
high quality and fully embedded Conduct Risk
consumers have trust and confidence that regulated firms through day-to-day supervision
Framework. Robust enforcement action will
regulated firms are acting in their best interests. and inspection work.
continue to underpin our powers to protect
We recognise the detriment to consumers that
consumers of financial services. • Enhancing confidence and trust in the financial
can occur if such firms do not behave
system through high quality regulation,
appropriately. We also recognise the importance • Continuing to develop our approach to
purposeful engagement, effective gatekeeping,
of firms being well governed and financially consumer protection supervision, conducting
assertive supervision and robust enforcement.
sound in order to mitigate the risks posed to more intrusive and targeted assessments of
consumers. We intend to focus further on those firms and products that pose the greatest • Supporting the fight against money laundering,
strengthening consumer and investor protection. potential harm to consumers. terrorist financing, market abuse and the
unauthorised provision of financial services.
• Focusing on the culture of firms and individual
accountability of the people who run the firms
» we regulate, to embed high standards of conduct »
CENTRAL BANK OF IRELAND 15~ STRATEGIC PLAN 2019-2021
CONTENTS Foreword Mission, Mandate Strategic Review of Strategy Statutory Organisational
and Vision Themes 2016–2018 Objectives Objectives
Strengthening Brexit Strengthening Engaging and Enhancing
Strategic Theme: Resilience Consumer Influencing Organisational
Engaging and Protection Capability
Influencing
Desired Outcome: We engage with and listen to the public and stakeholders to inform our work and
help build trust in, and understanding of, the Central Bank. We strategically influence and shape key
decisions and policies in Europe and internationally.
In order to effectively deliver on our mandate, Over the next three years, a key focus will be to • Actively contributing to European System of
we work closely with other bodies, as well as enhance our strategic engagement with the Central Banks/Eurosystem policy-making
engaging with and listening to the wider public public and relevant stakeholders at home and through strategic engagement at key
and other stakeholders in Ireland. We aim to be abroad. European System of Central Banks/
an open and transparent organisation and to be Eurosystem Committees.
We will do this by:
accountable for our actions. This helps the
• Engaging strategically with the Single
public and other stakeholders to understand • Engaging with the public directly and online, in
Supervisory Mechanism and the European
what we do and to have confidence that we are an open and transparent manner through our
Supervisory Authorities, European Systemic
delivering on our mandate. As a national central communications strategy, outreach campaigns
Risk Board and the Single Resolution
bank and Ireland’s competent authority, we and when providing services directly to the
Mechanism in the development of regulatory
work as part of the wider European framework public.
and resolution guidelines, standards, methods
including the European System of Central Banks
• Engaging with our key domestic stakeholders and risk analysis as well as with EU and
and the European System of Financial
in an open and transparent way. international legislative frameworks in relation
Supervision. This wider European framework is
to sectors regulated by the Central Bank.
playing an ever-increasingly significant role and
it is important that we are effectively
influencing and shaping the agenda to support
» the delivery of our mandate. »
CENTRAL BANK OF IRELAND 16~ STRATEGIC PLAN 2019-2021
CONTENTS Foreword Mission, Mandate Strategic Review of Strategy Statutory Organisational
and Vision Themes 2016–2018 Objectives Objectives
Strengthening Brexit Strengthening Engaging and Enhancing
Strategic Theme: Resilience Consumer Influencing Organisational
Enhancing Protection Capability
Organisational Capability
Desired Outcome: Our culture, resources and capabilities support the effective and efficient delivery
of our mandate whilst maintaining the highest standards of governance and risk management.
The Central Bank’s mandate is broad and We will do this by: • Continuing to strengthen internal governance
complex and we operate in a dynamic and and risk management, information and cyber
• Implementing our People Strategy, which
challenging environment where effective security along with our security systems and
includes our approach to resourcing, learning
delivery of the strategy requires the necessary ability to recover from a business continuity
and development, leadership development
internal capabilities, systems and processes. Our perspective.
and talent management, enabling our people
people are our most important resource and it is
to deliver in an environment that supports • Ensuring the delivery of our accountability
important that we support and enable them so
and promotes diversity and inclusion and obligations by applying the highest standards
that they have the necessary skills and expertise
strengthens our capability and agility. of transparency and clarity in our statutory
to deliver to the highest standards. We need to
reporting.
empower staff to reach their full potential in an • Significantly investing in the delivery of our
inclusive culture, which values diversity. As a Data Strategy, which will support enhanced • Reviewing our principles and priority
knowledge-based organisation the management data analytics and data management across behaviours (which articulate our desired
and analysis of data has become a critical the organisation, and by rolling out an culture) and embedding these to ensure a
activity, which requires ongoing investment. We electronic document and record management positive culture reflecting our One Bank
need to ensure that the appropriate structures, system across the Central Bank. ethos, commitment to public service,
facilities, processes, competencies and diversity and inclusion.
• Ensuring that appropriate structures,
technologies are in place to support the effective
facilities, processes, competencies and
delivery of our mandate. We also need to ensure
technologies are in place to support the
that we prudently manage our operations by
successful delivery of our organisational
» practising the highest standards of governance,
priorities. »
accountability and risk management.
CENTRAL BANK OF IRELAND 17CONTENTS
CENTRAL BANK OF IRELAND
STRATEGIC PLAN
2019–2021
PART TWO
» »
CENTRAL BANK OF IRELAND 18~ STRATEGIC PLAN 2019-2021
CONTENTS Foreword Mission, Mandate Strategic Review of Strategy Statutory Organisational
and Vision Themes 2016–2018 Objectives Objectives
Review of Strategy 2016–2018
Introduction Strategic Responsibilities element was the work undertaken, in cooperation
During this period, the ECB non-standard with Europe’s Single Resolution Board, to ensure
The Central Bank’s 2016-2018 Strategic Plan
monetary policy measures were aimed at that any future resolution of troubled financial
was framed in the context of the legacy of the
ensuring inflation continued to move towards institutions minimises the need for taxpayer
crisis and a dynamic policy environment.
the Governing Council’s stated aim of funding. Resolution plans for all Irish banks were
Despite the emergence of some significant new
maintaining inflation rates below, but close developed. The IMF Financial Sector Assessment
challenges over this period, the scope of the
to, 2%. While the net purchases under the Programme delivered a positive assessment of
2016-2018 Strategic Plan remained largely
Asset Purchase Programme are due to end by Ireland’s financial sector resilience, regulatory and
appropriate, helping to guide the Central Bank
December 2018, they have led to changes in the supervisory framework and capacity to manage
in meeting its broad mandate.
size and composition of the balance sheets of and resolve financial crises.
National Central Banks and the Central Bank has
In terms of supervisory activity, this was a very
taken prudent steps to manage its own balance
busy period of policy formation and transposition
sheet risks.
as Ireland’s supervisory approach became ever
The Central Bank enhanced its macro-prudential more closely aligned to that of Europe. Significant
policy framework aimed at safeguarding financial new regulatory measures, such as Solvency II, the
stability and protecting consumers. This included Markets in Financial Instruments Directive
the setting of additional capital buffers for banks (MiFID II), the Bank Recovery and Resolution
and the further refinement of the mortgage Directive and the Payments Services Directive
measures that are designed to enhance the (PSD2) were successfully introduced. There were
resilience of borrowers and encourage prudent many enhancements made to proactive
lending practices. A further development in this supervisory engagement across all sectors,
respect was the successful establishment of the including banking as part of the ECB’s Single
Central Credit Register. There was also a Supervisory Mechanism.
continued focus on addressing the outstanding
stock of non-performing loans. Another important
» »
CENTRAL BANK OF IRELAND 19~ STRATEGIC PLAN 2019-2021
CONTENTS Foreword Mission, Mandate Strategic Review of Strategy Statutory Organisational
and Vision Themes 2016–2018 Objectives Objectives
In order to better meet the growing regulatory emerged as a key priority. This covered multiple place. Data management was enhanced through
demands, there was a significant re-structuring functions across the Central Bank, coordinated the development of a Data Strategy. The Central
within the Central Bank during this period, with by a Brexit Taskforce, and included extensive Bank also enhanced its approach to transparency
the reorganisation of supervisory directorates expert analysis and supervisory engagement, and accountability during this period. This
and the creation of new Prudential Regulation ensuring supervised firms made appropriate incorporated a review of governance including
and Financial Conduct Pillars. The Central Bank preparations and contingency plans. The Central the adoption of the new Code of Practice for the
developed a new financial conduct strategy to Bank also provided its own ongoing analysis and Governance of State Bodies. There was a greater
further enhance protections for consumers and views to wider domestic policy makers. A very emphasis on communications, including the
investors. One of the key areas of work was the significant element of the Brexit workload was design and launch of a new Central Bank website
Tracker Mortgage Examination. This spanned the dealing with authorisation applications across all and public outreach campaigns.
full strategic planning period, and was a complex, sectors, including large, complex and in some
resource intensive undertaking. It has resulted in cases, new financial services for Ireland, such as Conclusion
very significant redress and compensation for broker dealers and market infrastructure firms. The Central Bank has met its key objectives
impacted customers of the lenders. It also shone under the 2016-2018 Strategic Plan, while also
a light on the negative cultural behaviours within Strategic Enablers dealing with new developments, challenges and
the banking sector. The Central Bank concluded The 2016-2018 period has been one of signifi- risks, such as Brexit and an evolving approach to
and published a comprehensive review of culture cant growth for the Central Bank arising from a financial conduct supervision. Many of the key
in the five main Irish retail banks. Each lender wider mandate, more intensive approach to areas of focus from the 2016-2018 Strategic Plan
was issued with specific findings to remedy. The supervision and in meeting the challenges from will continue to feature over the coming period
Central Bank also continued to pursue a credible Brexit. The workforce has grown by approxi- as the Central Bank continues to work to deliver
and effective approach to enforcement during mately 27 per cent in this period. The Central on its core functions.
this period. Bank consolidated its city centre accommodation
through the development of a new Docklands
Challenges and Risks Campus. In addition, there was significant invest-
The Central Bank had to deal with new challeng- ment made in technology and an enhanced focus
es during this period. The management of the on staff development and diversity and inclusion,
» economic and financial risks arising from Brexit to ensure the right skills and capabilities are in »
CENTRAL BANK OF IRELAND 20~ STRATEGIC PLAN 2019-2021
CONTENTS Foreword Mission, Mandate Strategic Review of Strategy Statutory Organisational
and Vision Themes 2016–2018 Objectives Objectives
Our Statutory Objectives
In discharging its functions and exercising its powers as
part of the European System of Central Banks, the primary
objective of the Central Bank is to maintain price stability.
The Central Bank also has the following statutory objectives:
The discharge of such
other functions and
Price Financial Resolution Financial Payments, Economic powers conferred on
Stability Stability Regulation Settlements Analysis the Central Bank by
and Currency and Statistics law including:
As part of the The stability of Resolution of financial The proper and effective The efficient and The provision of analysis The operation of
European System the financial difficulties in credit regulation of financial effective operation of and comment to support the Central Credit
of Central Banks, system overall. institutions, certain service providers and payment and settlement national economic Register, the Deposit
the primary objective investment firms and markets, while ensuring systems. policy development. Guarantee Scheme
of the Central Bank credit unions. that the best interests of and the Insurance
is to maintain consumers of financial Compensation Fund.
price stability. services are protected.
» »
CENTRAL BANK OF IRELAND 21~ STRATEGIC PLAN 2019-2021
CONTENTS Foreword Mission, Mandate Strategic Review of Strategy Statutory Organisational
and Vision Themes 2016–2018 Objectives Objectives
Statutory Objective: Price
Stability
Financial
Stability
Resolution Financial
Regulation
Payments,
Settlements
Economic
Analysis and
Price Stability and Currency Statistics
Our Statutory Mandate: “As part of the European System of Central Banks, the primary objective
of the Central Bank is to maintain price stability.”
The Treaty on the Functioning of the European Key Actions: Efficient Implementation of Monetary Policy
Union confers this primary objective on all We will efficiently support the implementation of
Monetary Policy Assessment
National Central Banks of the Eurosystem. The monetary policy through our financial operations
We will closely assess the impact of the
Governing Council of the ECB is responsible for functions.
changing monetary policy environment on
the setting of monetary policy in the euro area.
macroeconomic and financial conditions. Desired Outcomes:
The Central Bank provides support and analysis
to the Governor in his capacity as a member of Review of Monetary Policy Framework • We contribute effectively to monetary policy
the Governing Council, and implements the We will play our part across the key ECB formation.
monetary policy decisions of the Governing committees in the ECB’s review of the monetary
• We are operationally ready to implement any
Council. The National Central Banks together policy framework.
new elements of the monetary policy
with the ECB are responsible for conducting and
Effectively Contribute to Monetary framework.
implementing the single monetary policy for the
Policy Formation
currency union with the primary objective of
We will effectively contribute to monetary policy
maintaining price stability.
formation through strategic engagement at key
European System of Central Banks/Eurosystem
committees.
» »
CENTRAL BANK OF IRELAND 22~ STRATEGIC PLAN 2019-2021
CONTENTS Foreword Mission, Mandate Strategic Review of Strategy Statutory Organisational
and Vision Themes 2016–2018 Objectives Objectives
Statutory Objective: Price
Stability
Financial
Stability
Resolution Financial
Regulation
Payments,
Settlements
Economic
Analysis and
Financial Stability and Currency Statistics
Our Statutory Mandate: “The stability of the financial system overall.”
The Central Bank has a mandate in domestic Key Actions: • deepen our monitoring and analysis of the
and European legislation to contribute to market-based finance sector to identify
Macro-prudential Policy
financial stability in Ireland and across the financial stability risks; and
We will monitor closely the threats to financial
euro area, which it carries out in conjunction
stability using macro-prudential tools including • use credit data insights from the Central
with other relevant authorities. To achieve
calibrating countercyclical capital buffers and Credit Register, AnaCredit and non-bank
its mandate, the Central Bank identifies,
mortgage measures, as necessary, to maintain financial data.
implements and monitors policies to limit the
stability.
impact of systemic risks on both the financial Strengthening Resilience of Regulated Firms
system and the economy. As the macro- Developing our Data Analytical Capabilities We will deliver effective supervision of those
prudential authority for Ireland, the In order to identify emerging risks and their regulated firms and markets that can pose a threat
Central Bank focuses on the mitigation potential build-up over time, and to inform both to financial stability to ensure they are well
of system-wide risks with the aim of internal and external policy-making, we will: managed and financially sound.
increasing the resilience of the Irish
• enhance our analysis of international financial We will continue to address existing
financial system.
flows and cross-border linkages; vulnerabilities and weaknesses remaining from
the financial crisis, particularly relating to
• increase our capability and use of data
mortgage arrears and non-performing loans.
analytics across financial regulation;
» »
CENTRAL BANK OF IRELAND 23~ STRATEGIC PLAN 2019-2021
CONTENTS Foreword Mission, Mandate Strategic Review of Strategy Statutory Organisational
and Vision Themes 2016–2018 Objectives Objectives
~
Statutory Objective: Price
Stability
Financial
Stability
Resolution Financial
Regulation
Payments,
Settlements
Economic
Analysis and
and Currency Statistics
Financial Stability continued…
Financial Crisis Preparedness Desired Outcomes:
We will enhance our financial crisis preparedness
• Resilience of the financial system has been
and management capability. We will engage with
strengthened in order to better withstand
other agencies at national, European and
future shocks.
international levels and with key stakeholders in
the financial sector, to contribute to the broader • Enhanced use of data to inform decisions and
financial sector’s crisis response capabilities. policy-making.
• Effective crisis management arrangements are
in place that support the Central Bank and
other key stakeholders engaged in the Irish
financial sector to manage the response to any
potential financial crisis.
» »
CENTRAL BANK OF IRELAND 24~ STRATEGIC PLAN 2019-2021
CONTENTS Foreword Mission, Mandate Strategic Review of Strategy Statutory Organisational
and Vision Themes 2016–2018 Objectives Objectives
Statutory Objective: Price
Stability
Financial
Stability
Resolution Financial
Regulation
Payments,
Settlements
Economic
Analysis and
Resolution and Currency Statistics
Our Statutory Mandate: “Resolution of financial difficulties in credit institutions, certain investment
firms and credit unions.”
The Central Bank is Ireland’s national resolution Key Actions: Desired Outcomes:
authority and it has responsibility for the
Resolution Readiness • Relevant regulated firms are deemed
orderly resolution of failing credit institutions,
We will prepare for and manage the failure of resolvable and the Central Bank is prepared
certain investment firms and credit unions. It
relevant regulated firms in an orderly fashion to to manage firm failure to minimise the impact
works with the Single Resolution Board in
ensure minimum disruption to financial stability, on financial stability, the economy and
accordance with the SRM for those credit
the economy and consumers. consumers.
institutions under the remit of the Single
Resolution Board. Recognising that regulated We will continue to ensure relevant regulated • Relevant regulated firms are prepared to
firms may fail, we seek to ensure that this firms improve their ability to recover from manage and recover from severe financial
happens in an orderly manner. financial difficulty, and further enhance their difficulties.
resolution plans, such that we can resolve failing
• We have strategically influenced the
firms in a way that minimises externalities.
implementation and development of the
Engaging and Influencing within the Single EU resolution framework.
Resolution Mechanism
We will engage strategically with the Single
Resolution Board and European authorities
in implementing and further developing the
EU resolution framework.
» »
CENTRAL BANK OF IRELAND 25~ STRATEGIC PLAN 2019-2021
CONTENTS Foreword Mission, Mandate Strategic Review of Strategy Statutory Organisational
and Vision Themes 2016–2018 Objectives Objectives
Statutory Objective: Price
Stability
Financial
Stability
Resolution Financial
Regulation
Payments,
Settlements
Economic
Analysis and
Financial Regulation and Currency Statistics
Our Statutory Mandate: “The proper and effective regulation of financial service providers and
markets, while ensuring that the best interests of consumers of financial services are protected.”
The Central Bank seeks to achieve a Key Actions: Enhancing the Regulatory and Supervisory
trustworthy and resilient financial services Framework
Addressing Risks Through Effective Supervision
system that sustainably serves the needs of the We will develop the regulatory and policy
We will work to ensure all firms regulated by the
wider economy and its customers, where framework to address gaps and improve its
Central Bank are appropriately and effectively
regulated firms and individuals adhere to a functioning and will harness the benefits of
supervised.
culture of fairness and high standards. increased data and analytical capability, risk
We will drive further improvements in the specialists and use of targeted inspection activity
We discharge our duties through a robust
governance and risk management of regulated to enhance our supervisory approach.
regulatory framework, delivering effective
firms including the building of their IT resilience
gatekeeping and intrusive supervision Mitigating Brexit Risks and Ensuring the
and enhancing diversity and inclusion.
underpinned by a credible threat of Readiness of New and Existing Firms
enforcement. Financial Innovation We will further enhance our regulatory tools and
We will identify and act upon the emerging risks, supervisory approaches to ensure that the wider
opportunities and challenges presented by financial stability, market and conduct risks
financial innovation (Fintech) and the rapidly associated with the increased nature, scale and
evolving technological landscape within which complexity of the Irish financial system are
we, and the regulated firms and individuals that understood and effectively mitigated.
we supervise, operate.
We will ensure that regulated firms are
appropriately prepared for the full range of
» Brexit scenarios and that they are safeguarding »
the interests of their customers.
CENTRAL BANK OF IRELAND 26~ STRATEGIC PLAN 2019-2021
CONTENTS Foreword Mission, Mandate Strategic Review of Strategy Statutory Organisational
and Vision Themes 2016–2018 Objectives Objectives
Statutory Objective: Price
Stability
Financial
Stability
Resolution Financial
Regulation
Payments,
Settlements
Economic
Analysis and
and Currency Statistics
Financial Regulation continued…
We will ensure a robust and effective Focus on Culture and Individual Accountability Engaging and Influencing – Regulatory
authorisation process for all firms seeking We will focus on the culture of firms and Standards Development
authorisation, including those as a result individual accountability of the people who run We will engage strategically with the Single
of Brexit. the firms we regulate, to embed high standards Supervisory Mechanism and the European
that deliver fair outcomes for consumers. We will Supervisory Authorities in the development of
Building a Systematic and Challenging Approach
take action where these standards are not met regulatory guidelines, standards, methods and risk
to Financial Conduct Regulation
and press for further strengthening of standards analysis, as well as with EU legislative bodies in
We will strengthen our approach to conduct risk
and individual accountability. relation to sectors regulated by the Central Bank.
regulation, set our expectations, and challenge
the firms and markets that we supervise, We will complete supervisory reviews of Enhancing the Transparency of the Funding Levy
requiring them to have in place a high quality and governance and risk management cultures in We will enhance the transparency and
fully embedded Conduct Risk Framework. Robust regulated firms through day-to-day supervision predictability of the levy applied to regulated
enforcement action will continue to underpin our and inspection work. firms and continue the move towards recovering
powers to protect consumers of financial services 100% of our regulatory costs from regulated
Enhancing Confidence and Trust
and we will utilise our powers of redress where firms.
in the Financial System
firms have caused detriment.
We will enhance confidence and trust in the
Developing our Approach to Consumer financial system through high quality regulation,
Protection Supervision purposeful engagement, effective gatekeeping,
We will continue to develop our approach to assertive supervision and robust enforcement.
consumer protection supervision, conducting
We will support the fight against money
more intrusive and targeted assessments of those
laundering, terrorist financing, market abuse and
firms and products that pose the greatest
the unauthorised provision of financial services.
potential harm to consumers.
» »
CENTRAL BANK OF IRELAND 27~ STRATEGIC PLAN 2019-2021
CONTENTS Foreword Mission, Mandate Strategic Review of Strategy Statutory Organisational
and Vision Themes 2016–2018 Objectives Objectives
Statutory Objective: Price
Stability
Financial
Stability
Resolution Financial
Regulation
Payments,
Settlements
Economic
Analysis and
and Currency Statistics
Financial Regulation continued…
Desired Outcomes:
• The best interests of consumers and investors • Regulated firms demonstrate an appropriate
are protected, and markets operate in a fair, risk and consumer-focused culture.
orderly and transparent manner.
• Our regulatory tools and supervisory
• Confidence and trust in the financial system is approaches are fit for purpose.
enhanced.
• We have strategically influenced and shaped
• Regulated firms have sufficient financial key decisions and policies in Europe.
resources, including under scenarios of
• The funding levy is transparent and
plausible but severe stress, and have
predictable.
sustainable business models over the
long-term.
• The risks emerging from Brexit and financial
innovation have been mitigated through our
supervisory approach.
» »
CENTRAL BANK OF IRELAND 28~ STRATEGIC PLAN 2019-2021
CONTENTS Foreword Mission, Mandate Strategic Review of Strategy Statutory Organisational
and Vision Themes 2016–2018 Objectives Objectives
Statutory Objective: Price
Stability
Financial
Stability
Resolution Financial
Regulation
Payments,
Settlements
Economic
Analysis and
Payments, and Currency Statistics
Settlements and Currency
Our Statutory Mandate: “The efficient and effective operation of payment and settlement systems.”
The Central Bank, in conjunction with the ECB Key Actions: Currency Capabilities
and other national competent authorities, is We will continue to improve the efficiency and
Payments and Settlements Developments
responsible for ensuring that payment, effectiveness of our currency related
We will play our part with the ECB on initiatives
settlement and clearing systems are safe, responsibilities and capabilities.
to enhance payments and settlements systems
resilient and efficient and that access to such
and engage with Irish market participants to Desired Outcomes:
systems is not restricted. The Central Bank also
ensure their successful implementation.
ensures the provision of banknotes and coins • The Central Bank and Irish market
and other related currency services to the Develop Strategy for National Cash Cycle participants have successfully migrated to the
public, a key component of payments systems. We will engage with cash cycle stakeholders to new Eurosystem services.
develop and implement an appropriate strategy
• Our strategic approach to the development of
for the Irish cash cycle that will meet the needs of
the national cash cycle has been enhanced.
the evolving hybrid cash/digital payments
landscape. • The operational standards in relation to
payments and currency meet the highest
Enhancements to Payment and Currency
benchmark standards.
Systems
We will enhance the Central Bank’s payments
and currency systems and processes to further
mitigate risks.
» »
CENTRAL BANK OF IRELAND 29~ STRATEGIC PLAN 2019-2021
CONTENTS Foreword Mission, Mandate Strategic Review of Strategy Statutory Organisational
and Vision Themes 2016–2018 Objectives Objectives
~
Statutory Objective: Price
Stability
Financial
Stability
Resolution Financial
Regulation
Payments,
Settlements
Economic
Analysis and
Economic Analysis and Currency Statistics
and Statistics
Our Statutory Mandate: “The provision of analysis and comment to support national economic
policy development.”
The Central Bank undertakes economic analysis, Key Actions: Enhancing Data Quality and Availability Across
research, data collection and statistical analysis, the Central Bank to Support Policy-making
Economic Analysis
designed to inform economic policy-making We will enhance the range and quality of data
domestically and internationally. We will provide clear and insightful analysis that resources in order to strengthen internal and
deepens our understanding of the Irish economy. external capability of evidence-based policy-
Monitor and Assess External Risks making.
We will continue to conduct research and Desired Outcomes:
evidence-based analysis of the potential risks
• We have conducted high quality economic
arising from Brexit and the broader international
research and published detailed analysis and
trade and taxation environment to financial
insight.
stability and the broader economy and effectively
communicate the findings to key stakeholders and • This analysis and use of enhanced data will
policy makers. have supported the development of our
broader economic and policy work including
analysis of potential risks.
» »
CENTRAL BANK OF IRELAND 30STRATEGIC PLAN 2019-2021
~
:
CONTENTS Foreword Mission, Mandate Strategic Review of Strategy Statutory Organisational
and Vision Themes 2016–2018 Objectives Objectives
Organisational Objectives
The Central Bank is statutorily required to As a knowledge-based organisation, the effective Key Actions:
allocate resources effectively, efficiently and management and analysis of data and
Maintain and Develop the Capacity and
economically. The development of the Central information is core to the successful delivery of
Capabilities to Address the Changing Needs of
Bank’s organisational capabilities is crucial to our strategy. Our internal processes and systems
the Organisation
address our broad and complex mandate and must support the delivery of our strategy across
deliver on our Mission in the public interest. Our the organisation. We will implement our People Strategy, which
people are our most important resource and it is includes our approach to resourcing, learning and
In serving the public interest, we prudently
critical that the Central Bank attracts, retains development, leadership development and talent
manage our operations and aim to meet the
and develops staff committed to public service management, enabling our people to deliver in an
highest standards of internal governance and risk
and enables them deliver to their best in a environment that supports and promotes
management.
positive work environment that fosters diversity and inclusion and strengthens our
collaboration. We seek to be an open and transparent capability and agility.
organisation, engaging with and listening to our
Our Vision is that the Central Bank is an New System Capability
stakeholders, including our staff, to inform our
employer of choice, where our valued and We will ensure that appropriate structures,
work and to help build awareness of and trust in
diverse staff are committed to excellence in the processes, competencies and technologies are in
what we do.
delivery of our mandate, have the opportunity place to support the successful delivery of our
to build fulfilling careers, and reach their The Central Bank places a strong emphasis on organisational priorities.
potential. working responsibly. As a public institution, we
We will invest in the delivery of our Data
understand that our work has an impact on the
Strategy, which will support enhanced data
environment, the communities in which we operate
analytics and data management across the
and our stakeholders. We believe in carrying out
organisation, as well as rolling out a new
our duties in a socially responsible way.
electronic document and record management
We strive for a One Bank culture where we work system across the Central Bank.
collaboratively across the Central Bank to
maximise our effectiveness and efficiency in
» order to deliver on our mandate. »
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