Central Bank of Ireland sets out its regulatory and supervisory priorities for 2025 against the backdrop of global transformational change, heightened volatility and increasing complexity

• The Regulatory and Supervisory Outlook sets out the Central Bank’s perspectives on the key trends and risks shaping the financial sector, and its regulatory and supervisory priorities for the year ahead. This year’s report is published amidst a period of global structural shifts and continuing technological advances.
• The financial sector is undergoing rapid change, including through innovation, bringing new products and services to the market, but also new risks that need to be managed. Along with heightened volatility and increasing complexity in the global macro environment, these could amplify risks to the financial sector and to the consumers the Central Bank works to protect.
• The Central Bank itself is responding to the rapidly changing environment through its regulatory and supervisory work and priorities. This includes adopting a new supervisory approach which will support a more integrated and therefore holistic consideration of all aspects of its financial regulation mandate – continuing to ensure the financial sector is operating in the best interests of consumers and the wider economy.
• The Central Bank will also be proactively engaging on the regulatory simplification agenda this year, noting that simplification cannot compromise the core objectives of financial stability, resilience and protecting consumers.

The Central Bank of Ireland has today (Friday) published itsRegulatory and Supervisory Outlook, (PDF 2.14MB) encompassing its risk assessment and priorities for the period ahead. The report sets out its views and supervisory agenda and is intended to assist financial firms in their own engagement with the Central Bank and its expectations of them. The report follows Governor Makhlouf’s letter to the Minister for Finance (PDF 2.63MB) setting out our financial regulation priorities for the year ahead and the introduction of our new supervisory approach (PDF 324.62KB).

Speaking on publication, Governor Makhlouf said “We are living through a period of profound change. An increasingly fast-changing, uncertain and volatile world is being shaped by a complex interplay of geopolitical, economic, technological and environmental forces.”

“The global financial sector has remained resilient in recent years in the face of overlapping shocks, geopolitical tensions and economic fragmentation. However, significant technological, demographic, climate and institutional transitions underway are re-shaping our world. It is therefore important that the financial sector’s resilience is maintained, and strengthened where necessary, that the sector is adaptable, and financial firms put consumers’ interests at the heart of their strategies.”

“The headline risk areas facing the financial sector and consumers of financial services have largely remained the same as last year, though a number of these are rising with some abating. We see growing operational risks. These reflect the increasing digitalisation of financial services and the growing reliance the financial sector has on outsourced services provided by third parties, including cloud service providers. Cyberattack threat levels are also increasing. We have all seen the practical consequences service outages due to operational incidents can have on consumers and the wider economy.”

“The very large and internationally-oriented financial sector in Ireland has a key role to play in helping finance the crucial transitions underway. These range from supporting the transition to a net zero economy, to helping Europe address its innovation and productivity challenges.

“Turning to our own role, we will continue the improvement and transformation of our approach to regulation and supervision. We introduced a new supervisory approach in January. This remains outcomes-focused and risk-based, but is now delivered through a more integrated approach to the different aspects of our mandate and how we organise our work. This new supervisory approach is an important contribution to enhancing the effectiveness of our supervisory processes so that we can continue to ensure the financial system is operating in the best interests of consumers and the wider economy.”

“On regulatory simplification, as I wrote to the Minister, this is an agenda we will proactively engage with this year, working with peers and other stakeholders to enable properly-functioning markets that support innovation and productivity without undermining financial stability and consumer protection.  In any drive to simplify, however, we need to be clear that we do not compromise on delivering the stability, resilience and protections that consumers and the wider economy need, and indeed the public expects.”