Insights Blog

The Central Bank of Ireland’s Regulatory Supervisory Outlook Report 2024 and accompanying Letter to the Minister for Finance were published on 29 February 2024. While optimistic that the Irish economy will grow, the Central Bank sees the interest rate environment and inflation (and their impact on asset valuations, particularly in the CRE space), liquidity mismatches and increased leverage, and operational risk and resilience, as key risk areas.  Geopolitical tensions, climate and environmental-related challenges (in particular growing physical, transition and litigation risks) and rapid digitalisation are seen as presenting continuing challenges.


These include revising the Consumer Protection Code (consultation still due in Q1 2024), ongoing implementation of the Individual Accountability Framework, the implementation of both DORA and MiCA, and addressing systemic risks in the non-bank sector (with a particular focus on macroprudential risks).  While these topics were expected to feature prominently on the priorities list for 2024, a notable addition is the development of policy work and supervisory expectations on the use of AI in financial services.  The Report includes a specific ‘Spotlight’ section on AI.


  • Banks will be subject to a thematic review on engagement with borrowers in arrears, and their work towards improving ESG disclosures and implementing ESG-related supervisory expectations will also be assessed.
  • Against the backdrop of 2022/2023 interest rate increases, retail credit firms and credit servicing firms can expect the Central Bank to focus on how those firms are engaging with borrowers in arrears (a thematic review is planned), whether firms have sufficient operational capacity (with the necessary processes and controls in place) and challenging firms to resolve distressed debt.
  • For MiFID investment firms, outsourcing, operational resilience, marketing and advertising, and the integration of sustainability requirements in firms’ suitability assessments and product governance processes will be focus areas.
  • The Letter to the Minister noted a heightened risk level associated with payment institutions and e-money firms – the Central Bank’s planned supervisory activities in that sector will target previously-identified safeguarding issues; governance, risk management and control frameworks; improvements to regulatory returns; and the impact of both DORA and the planned changes to the Payment Services Directive.
  • Financial crime (AML/CFT, market abuse, financial sanctions, fraud) will be a priority supervisory area across all sectors. From an AML/CFT perspective, again payment institutions and e-money firms can expect increased supervisory focus from the Central Bank. The Central Bank also plans to improve the process for its Risk Evaluation Questionnaires (and aims to put bespoke questionnaires in place for each sector).  Suspicious transactions and orders reporting will continue to be a top supervisory priority in the area of market abuse.
  • Our Asset Management and Investment Funds and Insurance groups have also published sector-specific insights on the Report (here (Funds) and here (Insurance))


The Central Bank and Department of Finance will work closely together on various key matters, including the implementation of recommendations arising from the Retail Banking Review, the proposed Access to Cash legislation, the upcoming National Payments Strategy, and the completion of the Funds Sector 2030 review.


The Central Bank notes the following as key upcoming developments for 2024: the EU AI Act, the recently-agreed EU AML/CFT package, the final Basel III implementation package (CRR 3 and CRD VI), the CPC review, DORA implementation, ESAP, IAF/SEAR, the upcoming Instant Euro Credit Transfers Regulation, MiCA implementation, the proposals to update the Payment Services Directive with a new directive and regulation (with a focus on combatting authorised push payment fraud), the European Commission’s Retail Investment Strategy and the Solvency II review.