1. Governor of Central Bank delivers speech on monetary policy imperatives in a changing global landscape

On 13 May 2025, Governor of the Central Bank of Ireland (“Central Bank”), Gabriel Makhlouf, delivered a speech (“Speech”) at the International Economic Symposium in Dublin. The theme of the Speech centred around the need for strengthening resilience in tandem with having the right macroeconomic policies, in order to ensure an optimal economic policy mix.

Monetary Policy

Governor Makhlouf referenced the current geoeconomic fragmentation, noting that the global economic integration we have been accustomed to is “now stalled if not reversing.” In this context, he noted Ireland’s important role in the global financial system, noting that daily trade flow data is being carefully analysed during this period of volatility.

The Governor discussed sourcing strategies for businesses and the fragmentation of supply chains. He also referenced the fact that uncertainty is affecting investment with soft data pointing to a cooling in business and consumer sentiment. He further noted the potential long term effects of this, even if a full blown trade war is short lived.  The Governor also pointed to the potential for risks from elevated public and private debt levels to affect the financial system.

The Governor highlighted the need for central banks to incorporate risk and uncertainty more explicitly into their frameworks and also to ensure that frameworks are “sufficiently agile to account for sudden changes in the economic environment in order to allow for a swift exit from policies should there be a change in the state of the economy.”

Resilience Building

Governor Makhlouf identified three priorities as regards resilience building:

• completion of the single market to deliver deeper and stronger ties across the 27 member states;
• the delivery of a savings and investment union to complement the single market; and
• the launch of the Digital Euro in order to ensure strategic autonomy in European payments.

The Governor also discussed the Draghi and Letta reports, noting their emphasis on boosting European economic growth, however, the Governor noted that the recommendations in the reports could now also be viewed through an economic resilience lens. Some of the matters highlighted by Governor Makhlouf include:

• deepening market integration by harmonising regulations;
• the growth limitations resulting from fragmented national markets; and
• the fact that a less open US economy could lead to a redistribution of capital flows through Europe, further underpinning the need to complete the savings and investment union.

Digital Euro

The Governor addressed the need for a unified, pan-European payment method that does not rely on foreign providers, highlighting the lack of same as a key vulnerability for the EU. The Governor considered this matter in depth recently, for more information, see FIG Top 5 at 5 dated 17 April 2025. 

Conclusion

Governor Makhlouf noted that “uncertainty is the new certainty” and that policymakers and businesses need to be adaptable in such a context. In this regard, some of the matters highlighted are as follows:

• businesses need to develop more resilient operational models that can withstand supply chain disruptions and regulatory changes;
• the next wave of globalisation will require strategies that build resilience through geographic diversification, agile inventory planning, and financial innovation, including in payments; and
• an acknowledgment that the majority of the world continues to believe in a multilateral rules-based trading system and we need to be ready to work with trading partners that think similarly to us.
  

2. Deputy Governor of the Central Bank delivers speech on Central Bank mandate in a digitalising world

On 13 May 2025, Deputy Governor at the Central Bank, Mary Elizabeth McMunn, delivered a speech at the national fintech summit. The Speech centred around the theme of innovation in the financial sector, particularly from a regulatory perspective.

Acknowledging the many areas that could be discussed in terms of innovation, the Deputy Governor focused on two areas - the Central Bank’s thoughts on, and approach to, innovation in financial services and, secondly, the role of the Central Bank as regards digital assets, including tokenisation. 

Central Bank on Innovation

The Deputy Governor noted that rather than being anti-risk and anti-innovation, the Central Bank actually accepts risk and makes risk-based decisions, and so, sees its role as one of ensuring that those risks are well managed but not at the expense of stifling innovation. Indeed, the Deputy Governor highlighted that the Central Bank has been adapting its approach to better support, and anticipate, innovation.

Deputy Governor McMunn reiterated the regulation, authorisation and supervision functions of the Central Bank as a means of ensuring that innovation in the financial sector is operating in the best interests of consumers and the wider economy.  

Specifically, as regards the Central Bank’s engagement with innovation, the Deputy Governor discussed the innovation hub and the innovation sandbox. On the topic of the innovation hub, she noted that it has enabled the Central Bank to deepen its understanding of innovation in the financial sector, in the context of a period of rapid digitalisation. The Deputy Governor also emphasised proposals implemented by the Central Bank, following public consultation last year, such as:

• the enhancement of the innovation hub; and
• the establishment of the innovation sandbox programme – on which she provided an update. For more information, see FIG Top 5 at 5 dated 3 October 2024 and FIG Top 5 at 5 dated 23 January 2025 and FIG Top 5 at 5 dated 8 May 2025 .

Central Bank on Digital Assets

Under this heading, the Deputy Governor addressed the Central Bank’s approach to the crypto-asset sector and the implementation of MiCA. She noted that there are inherent risk associated with crypto-assets and reiterated the Central Bank’s warnings to consumers, particularly those with business models which are driven by the heavy marketing, offering and distributing of unbacked crypto-assets to retail customers for speculative purposes.

The Deputy Governor highlighted the fact that MiCA will not provide the same level of protection as exists for traditional financial products, nor will it mitigate all significant risks stemming from crypto-assets. However, she did highlight that MiCA is “a welcome step forward.”

Deputy Governor McMunn reminded consumers that MiCA does not cover all crypto-assets, and gave the examples of Bitcoin and Ether.

She then noted the importance of the need for the technology and its providers to be trustworthy, resilient, beneficial to consumers and to uphold, rather than jeopardise, the integrity of the financial system. The Deputy Governor went on to emphasise that it is those outcomes that are informing the Central Bank’s regulatory approach to crypto-assets, and indeed, to its implementation of MiCA. In that regard she referenced the team put in place by the Central Bank as regards crypto-asset service provider authorisations. For more information on this, see FIG Top 5 at 5 dated 9 January 2025 and FIG Top 5 at 5 dated 13 February 2025. 

Deputy Governor McMunn then turned to consider tokenisation and its “potentially transformative potential”. With specific reference to the use of “potentially transformative”, she noted that a ‘financial internet’ as envisaged by the Bank for International Settlements, would bring great efficiency and disintermediation gains and so would reduce costs and complexity, while empowering businesses and consumers.   Acknowledging that such a goal is at the far end of the spectrum, the Deputy Governor gave some examples where the potential benefits of tokenisation are being explored such as tokenisation of real assets, as well as financial assets such as money, securities, collateral, bank deposits, and funds. She cited the potential benefits as regards peer to peer transactions, smart contracts, and settlement and clearing.

The Deputy Governor noted that from a regulatory perspective, the Central Bank must ensure that there are no unintended regulatory impediments to the tokenisation of traditional assets. She also highlighted the importance of dialogue and engagement with the sector. Deputy Governor McMunn also pointed to the opportunity for the Central Bank to drive and influence change at a system level and also deepen its knowledge and engagement with innovation. In this regard, she particularly emphasised the need for public innovation to keep pace with private innovation, most notably in the areas of payments and settlements.

Addressing the crucial role of public money in a tokenised world, the Deputy Governor noted the efforts of the Eurosystem as regards supporting and fostering innovation in market infrastructures, and gave the example of the European Central Bank’s decision to expand its initiative to settle transactions recorded on distributed ledger technology in central bank money.

Additionally, Deputy Governor McMunn referenced ongoing work as regards the Digital Euro as key, both as regards the digital representation of public money but also in the context of a wholesale central bank digital currency as a tokenised central bank asset to operate in a tokenised system.

Conclusion

The Deputy Governor concluded with an acknowledgment of the ongoing geo-political developments and geo-economic fragmentation, making the point that innovation often results from challenging times – turning risks into opportunities. She called on firms and investors to continue to innovate and invest in technology, ensuring that as the digital transition continues, we will not be left behind.

On 8 May 2025, the Central Bank of Ireland (“Central Bank”) updated its General Good Requirements for Insurance and Reinsurance Undertakings (“Requirements”). This version of the Requirements supersedes the previous version that applied from 2 September 2019 to 7 May 2025.

The following is a summary of the changes:

There is a new section entitled “Central Bank of Ireland Codes” and under this section, the requirements in relation to the following are set out:

• the Consumer Protection Code; and
• the Minimum Competency Code 2017.

Other than being grouped under a new section, there are no changes to the content.

• There is an entirely new section entitled “Reporting Requirements” and under this section, reporting requirements applicable to insurance and reinsurance undertakings are set out, under the following categories:
  • National claims information database (“NCID”) reporting requirements, noting that the current classes of insurance that are in scope of the NCID are private motor insurance and employers’ and public liability insurance;
  • National specific templates (“NSTs)  - the Requirements describe NSTs as those reporting templates necessary to address requirements specific to a local market and / or the nature of insurance undertakings supervised in Ireland, and which are not catered for in the set of Solvency II harmonised reporting templates produced by the European Insurance and Occupational Pensions Authority (“EIOPA”);
  • Life Assurance (Provision of Information) Regulations, 2001 - life insurance undertakings must submit an actuarial certificate together with a directors declaration, under the Life Assurance (Provision of Information) Regulations 2001, to the Central Bank within one month of the end of the financial year;
  • Unclaimed Life Policies – Certificate of Compliance - life insurance undertakings are required to submit an Unclaimed Life Assurance - Certificate of Compliance to the Central Bank on an annual basis, under the Unclaimed Life Assurance Policies Act 2003; and
  • Temporary Run-Off Regime (“TRR”) – the Requirements set out that insurers in the UK and Gibraltar, to whom the TRR applies, are required to provide the Central Bank with the information outlined in a reporting form no later than four months from the date on which Regulation 13A (as amended) of the  Insurance (Miscellaneous Provisions) Act 2022  applies to the firm and at least annually afterwards via the Central Bank Portal.

The categories set out above were not in the 2019 version of the General Good Requirements for Insurance and Reinsurance Undertakings;

• Requirements relating to the non-life premium levy and the funding levy have been grouped under a new heading entitled “Applicable Levies” . The content is unchanged; and
• Requirements regarding motor insurance and health insurance have been grouped under a new heading entitled “Other Requirements” and other than the postal address for the Health Insurance Authority having changed, the content remains the same. 

1. Central Bank updates DORA communications and publications page on RoI

On 9 May 2025, the Department of Finance (“Department”) published the Anti-Money Laundering Steering Committee (“AMLSC”) work plan for 2025 (“Plan”).

The AMLSC aims to provide a national, cross-sectoral forum for the oversight of, and engagement on, Ireland’s anti-money laundering, counter terrorism financing and counter proliferation financing (“AML / CFT / CPF”) framework. 

The Plan sets out that the AMLSC is currently engaged in coordinating the preparations for Ireland’s next Financial Action Task Force (“FATF”) mutual evaluation review (“MER”).

The AMLSC is also preparing a national risk assessment (“NRA”) in order to assess risk in Ireland’s financial system from an AML / CFT / CPF perspective, with a particular focus on addressing gaps in the collection of AML / CFT / CPF statistical data, as was highlighted in Ireland’s last MER in 2017. 

The Plan sets out the high-level actions of the AMLSC for 2025, together with relevant timelines, under five themes as follows:

• National level coordination – some actions highlighted are the facilitation of coordination and collaboration between domestic stakeholders to ensure delivery of an effective, robust AML / CFT / CPF framework in Ireland / information sharing as regards emerging risks, trends and policy developments in AML / CFT / CPF at national, EU and international levels / development of common positions on issues of interest arising at FATF, or other global fora in advance of meetings;
• Preparation for MER – the Plan states that in H2 2025,  a new senior official’s subgroup will be formed to focus preparation for MER. The Plan also details that a subgroup of self-regulated bodies has been established to address gaps in statistical collection and standardisation for FATF purposes and also to address issues that may stem from the upcoming 6AMLD;
• Measuring and reporting AMLSC work – some of the actions highlighted by the Plan include:
  • publication of the fifth AMLSC annual report  on H1 2025; and
  • the Department is carrying out a survey of members of the AMLSC in order to assess the effectiveness of the AMLSC;
• Disseminate best practice - some of the actions highlighted by the Plan under this theme include:
  • a supervisory workshop in H1 2025, comprised of members of AMLSC who are engaged in AML / CFT / CPF supervision, to discuss trends and exchange best practices;
• Preparing for the EU Anti-Money Laundering Authority (“AMLA”) – under this theme, the Plan sets out that certain members of the AMLSC will contribute to and support the AMLA as it becomes operational in 2025. Further, the Plan states that members of the AMLSC will continue to work on the transposition of / readiness for 6AMLD.

The AMLSC will meet six times in 2025 to coordinate these initiatives across public and private sector stakeholders.

1. European Commission call for evidence on fostering integration, scale and efficient supervision in the single market

On 8 May 2025, the European Commission (“Commission”) published a call for evidence (“CfE”) on the savings and investment union (“SIU”) as regards fostering integration, scale and efficient supervision in the single market.

The goal of the SIU is to foster a seamless, integrated capital market across the EU by strengthening the supervisory framework, addressing regulatory fragmentation and ensuring better integration and deepening of capital markets throughout the EU, including in EU countries with less developed markets to realise the SIU’s full potential. Further, the elimination of regulatory and supervisory barriers will also contribute to the EU’s overarching goals of simplifying legislation and reducing the regulatory burden. For more information on the SIU, see FIG Top 5 at 5 dated 6 February 2025 and FIG Top 5 at 5 dated 27 March 2025.

The CfE aims to inform the public and stakeholders as regards the Commission’s future legislative work and seeks to gather the views and experience of relevant stakeholders to:

• identify the barriers that prevent the EU’s trading and post-trading infrastructures from reaping the benefits of a truly frictionless single market;
• examine whether the current regulatory and supervisory setting is fit for the capital markets and in particular for market operators with strong cross-border activities or operating in new or emerging sectors; and
• review the European Supervisory Authorities’ toolbox to assess areas where their effectiveness and efficiency can be strengthened and improved.

Next Steps

The CfE is open for feedback from 8 May 2025 to 5 June 2025 and anyone who is interested or might be affected by the SIU initiative is invited to reply, from national competent authorities to private citizens.

The Commission has stated that it will consider contributions received to the CfE when assessing and potentially drafting the SIU initiative. In addition, a targeted consultation on the integration of EU capital markets under the SIU strategy is currently open for feedback, for more information, see FIG Top 5 at 5 dated 17 April 2025.

2. Coreper approves Council’s position on Commission proposal to shorten settlement cycle to T+1 under CSDR

On 7 May 2025, member states’ representatives (“Coreper”) approved the European Council’s (“Council”) position on the European Commission’s (“Commission”) proposal (“Proposal”) to shorten the settlement cycle for transactions on transferable securities under the central securities depositories regulation (“CSDR”).

For more information on the proposed shortened settlement cycle, see FIG Top 5 at 5 dated 30 January 2025, FIG Top 5 at 5 dated 20 February 2025, FIG Top 5 at 5 dated 3 April 2025.

Next Steps

The Council can now commence interinstitutional negotiations with the European Parliament on the Proposal in order to reach a common position. Once the Parliament and the Council have adopted the Proposal, the regulation will enter into force 20 days after its publication in the Official Journal of the European Union and the new rules will apply from 11 October 2027. 

1. Delegated regulation amending RTS on market risk reflecting CRR III FRTB reforms published in OJEU

On 8 May 2025, Commission Delegated Regulation (EU) 2025 / 878 (“Delegated Regulation”) was published in the Official Journal of the European Union (“OJEU”).

The Delegated Regulation amends regulatory technical standards (“RTS”) laid down in the following delegated regulations:

• Delegated Regulation (EU) 2022/2059 as regards the technical details of back-testing and profit and loss attribution requirements.  The aggregation formula, currently laid down in Article 16 of that delegated regulation, which is now laid down in Article 325ba(3) of Regulation (EU) No 575/2013 (“CRR”), has been removed;
• Delegated Regulation (EU) 2022/2060 as regards the criteria for assessing the modellability of risk factors. This delegated regulation has been amended to adjust the documentation requirements laid down by it in order to support competent authorities in their assessment on whether to allow institutions to use market data provided by third-party vendors in the assessment of modellability of risk factors in accordance with Article 325be(1), second subparagraph, of CRR; and
• Delegated Regulation (EU) 2023/1577 as regards the treatment of foreign-exchange risk and commodity risk in the non-trading book has been amended to:
  • ensure additional clarity on the calculation of the own funds requirements for market risk in relation to non-trading book positions;
  • so that institutions can have clear policies outlining which are the trading desks in charge of managing those positions; and
  • to help identify whether the foreign exchange positions just relate to translation risk.

Next Steps

The Delegated Regulation will enter into force on, and apply from, 28 May 2025, being 20 days after its publication in the OJEU.

2. EBA updates technical standards on resolution planning reporting

On 7 May 2025, the European Banking Authority (“EBA”) published its updated final draft implementing technical standards (“Final Draft ITS”) on resolution planning reporting.

The EBA have stated that the Final Draft ITS promote harmonisation, proportionality and simplification as regards resolution planning as they avoid parallel data collections and eliminate data points that are redundant or of limited value. The EBA has pointed to measures in the Final Draft ITS to support simplification and proportionality such as:

• relieving entities from parallel data collections based on legal obligations coming from different authorities;
• the implementation of a modular core-plus-supplement approach that reduces the scope of reporting obligations for certain categories of reporting entities based on their size and complexity; and
• removing duplications and overlapping data points with minimum requirement for own funds and eligible liabilities (“MREL”) /  total loss absorbency requirement (“TLAC”), common reporting standards (“CoRep”) and financial reporting standards (“FinRep”), where the reporting entity has already submitted this data.

Next Steps

The Final Draft ITS will be submitted to the European Commission for endorsement before being published in the Official Journal of the European Union. The EBA will also develop the data point model, XBRL taxonomy and validation rules based on the Final Draft ITS. The new framework will be operational in 2026, with a first reporting reference date of 31 December 2025.  

3. ECB publishes annual report on sanctioning activities in the SSM in 2024

On 8 May 2025, the European Central Bank (“ECB”) published its annual report (“Report”) on sanctioning activities in the single supervisory mechanism (“SSM”) in 2024.

The Report considers formal sanctioning proceedings carried out by competent authorities within the scope of their respective powers, with a particular focus on data on the administrative penalties that were imposed for breaches of prudential requirements on supervised entities, other legal persons and natural persons falling within the scope of prudential supervision in the context of the SSM.

The Report states that the sanctioning proceedings conducted and finalised with penalties in 2024 focused mainly on breaches of prudential requirements in the area of internal governance, in line with the SSM supervisory priorities for 2024-26 - particularly the objective to accelerate the effective remediation of shortcomings in governance.

The Report found that there were also a significant number of sanctioning activities conducted in relation to reporting and large exposure breaches and also a considerable number of proceedings relating to capital requirements and qualifying holdings.

Some of the main findings of the Report are as follows:

• the number of proceedings conducted by competent authorities increased by 19% in 2024;
• the number of penalties imposed rose by 8%;
• proceedings relating to natural persons accounted for 54% of all proceedings handled and 45% of penalties imposed;
• other proceedings related to less significant institutions (“LSIs”), significant institutions (“SIs”) and legal persons other than SIs or LSIs;
• by the end of 2024, 182 administrative penalties had been imposed, with pecuniary penalties accounting for 77% of these and fines totalling approximately €27.9 million;
• the sum of €10.4 million was the highest pecuniary penalty and concerned an SI;
• the highest pecuniary penalty for an LSI was €5.7 million, €0.1 million for a natural person and approximately €0.1 million for a legal person other than an SI or an LSI;
• the remaining 23% of penalties were non-pecuniary in nature.

Next Steps

The ECB has stated, in the Report, that data on formal proceedings that were ongoing at the end of 2024 suggest that governance is likely to stay a focal point in terms of SSM sanctioning activities into the future. Additionally, the Report highlights that governance is among the ECB’s supervisory priorities for 2025 – 2027.