What enforcement powers does the Central Bank have?

Enforcement powers

The mission of the Central Bank is to safeguard stability and to protect consumers. Our enforcement work seeks to further that mission by ensuring that regulated firms and individuals are held to account where their behaviour fails to meet required standards. Enforcement action is essential to deter poor practices, achieve compliance and promote the behaviours we expect in the regulated financial services sector. 

Our enforcement processes

The Central Bank’s enforcement work relies principally on two processes to ensure that regulated firms and individuals are held to account:

  • Administrative Sanctions Procedure
    This is the means by which we investigate and sanction breaches of financial services law by regulated firms and individuals.
  • Fitness and Probity regime
    This requires individuals in designated positions within regulated firms to be competent and capable, honest, ethical and of integrity, and financially sound.

In addition, the Central Bank plays an important enforcement role as a gatekeeper for firms seeking to enter the financial sector and we can withdraw authorisations where appropriate. In relation to authorised banks we work in cooperation with the European Central Bank with the Single Supervisory Mechanism which is the system of banking supervision in Europe.  

Alongside our own enforcement processes, we also cooperate with other specialist agencies to ensure the law is upheld. For example, we are obliged to report to An Garda Síochána and others such as Revenue, where we have evidence that a criminal offence may have been committed. 

Our investigative powers

The extent of our investigative powers vary, depending on the process that is being followed. Take the Administrative Sanctions Procedure as an example.  First a case is referred by the supervision area who may suspect a breach of financial regulation. At the investigation stage, our multi-disciplinary teams of lawyers, accountants and investigative experts gather information by using the full suite of investigative powers to:

• Compel the production of documents
• Compel individuals to attend interviews
• Conduct on-site inspections.

Outcomes

At the outcome of an investigation, the Central Bank may decide to impose sanctions. Depending on the process that has been followed, different sanctions are available. Under the Administrative Sanctions Procedure, the sanctions for regulated firms include:

• A caution or reprimand
• Suspension or revocation of authorisation 
  and / or
• A fine of up to €10m or 10% of the firm’s turnover.

An individual, meanwhile, may be subject to:

• A caution or reprimand
• Disqualification from managing a regulated firm for a specified period 
  and / or
• A fine of up to €1m.

Under the Fitness & Probity regime, the Central Bank also has the power to suspend individuals or prohibit them from working in regulated financial services.     

Results

Our enforcement actions demonstrate our resolve to act where conduct falls below expected standards. It is our policy to make public statements about enforcement outcomes on this website. These statements – which include settlement agreements and prohibition notices – play a central role in offering guidance to regulated firms and individuals and maximising the deterrent effect of enforcement actions. The statements also serve to inform the public about the nature and extent of our enforcement work. As part of the Administrative Sanctions Procedure, the Central Bank may also hold inquiry hearings, which can be held in public.

From January 2006 to October 2017, 109 cases have been concluded through the Administrative Sanctions Procedure, resulting in a total of over €60 million in fines imposed on regulated firms and individuals. In 2016 we imposed more than €12m in fines, which was the highest annual total levied to date. Funds collected from monetary penalties imposed under our Administrative Sanctions regime are included in the Central Bank’s surplus income which is payable directly to the Exchequer.

Our enforcement actions

See also:

How we regulate - Introduction to Enforcement

Tracker Mortgage Examination