Central Bank of Ireland welcomes publication of the International Monetary Fund's assessment of Ireland's financial sector

• The IMF’s review recognises considerable progress in strengthening the framework for financial sector regulation, supervision and crisis management in Ireland.
• An increasingly large, complex and rapidly evolving financial system in Ireland raises new challenges for the future.
• Review makes targeted recommendations for further work, which will be considered by the Central Bank as it implements its new Strategy.

The Central Bank of Ireland welcomes the publication of the International Monetary Fund’s (IMF) Financial Sector Stability Assessment (FSSA) for Ireland. This report has been published following completion of the IMF’s review under its Financial Sector Assessment Program (FSAP).

The IMF conducts FSAP reviews for jurisdictions with systemically-important financial sectors, including Ireland, every five years. This is the second such review by the IMF since the financial crisis. The FSAP entailed an extensive and in-depth examination of the resilience of Ireland’s financial sector and the overall framework for regulation, supervision and crisis management in Ireland.

The IMF concluded that “Ireland has considerably strengthened financial sector regulation and supervision since the 2016 FSAP”, noting that this “is evidenced by a successful navigation through the challenges of Brexit, the pandemic, and now the war in Ukraine”. The IMF also highlighted that an increasingly large, complex and rapidly-evolving financial system in Ireland raises new challenges for the future, while pointing to the importance of fully addressing legacy issues from the financial crisis. In that context, the IMF made a number of targeted policy recommendations to the Irish authorities, including the Central Bank. These insights are timely as the Central Bank implements its new Strategy.

Governor of the Central Bank of Ireland, Gabriel Makhlouf said: “The Central Bank welcomes the IMF’s extensive work and engagement with a wide range of stakeholders over the past year as part of its FSAP review. The IMF’s review offered an important opportunity to provide an external assessment of the Central Bank’s framework for financial sector oversight and the resilience of the financial system in Ireland.

“The IMF’s review is a positive endorsement of Ireland’s continued advances in strengthening financial sector regulation, supervision, and crisis management. The review also underscores the important progress made in strengthening resilience of the financial sector over the past decade. Of course, as the financial system and the broader economy continue to evolve rapidly, we cannot stand still. The IMF’s review has provided valuable insights and targeted recommendations for further work, which will be considered by the Central Bank as it implements its new Strategy.”

The IMF also published today its Article IV review of the Irish economy. It sets out the views of IMF staff on a broad range of issues including the current position of the economy and its medium-to-long term prospects, medium-term fiscal policy, financial sector policy as well as structural policies.