Central Bank of Ireland hosts second annual Financial System Conference

• Financial System Conference gathers high-profile speakers on issues of global financial importance
• Governor Makhlouf launches innovation consultation, committing to Innovation Sandbox Programme
• He confirms key aspects of the Individual Accountability Framework

Today, Wednesday 8 November 2023, the Central Bank of Ireland is hosting the second annual Financial System Conference at the Aviva Stadium. The theme of #FSC2023, ‘Achieving good outcomes in an uncertain world’, brings together diverse perspectives on issues such as uncertainty in the geo-economic environment, how we secure customers’ interests, individual accountability and EU financial regulation.

Launching #FSC2023 this morning, Governor Gabriel Makhlouf said “Our financial system has changed significantly in recent years bringing new entrants, new products and new ways of serving consumers and the economy. This provides many opportunities; but if not adequately managed it can also pose many risks.

“I am delighted to welcome our many speakers, including: Andrew Bailey, Governor, Bank of England; Lisa D. Cook, Governor, Federal Reserve; and Alessandra Perrazzelli, Deputy Governor, Banca d’Italia, to Dublin to take part in debates and discussions throughout the day, and I look forward to listening and learning from our excellent panels.

Reflecting on the past year, and looking to the future, Governor Makhlouf noted “Throughout 2023 key domestic priorities for the Central Bank have been consulting and engaging on regulatory developments under our Consumer Protection Framework and Individual Accountability Framework, and working on our approach to innovation.

“Over the coming months we will be finalising our review of the Consumer Protection Code and implementing the new Individual Accountability Framework (IAF). Both areas of work have at their heart the imperative to deliver better outcomes: in terms of resilience, governance, and consumer and investor outcomes, while at the same time improving the overall regulatory context for firms.

“The revised Consumer Code will be a modern, single set of go-to regulations for consumers and firms alike, reflecting the changes that are taking place in the financial system. A key aim of the Code review is to bring coherence to these developments, delineate the resulting shape of the regulatory landscape and, looking forward, bring clear predictability and enhanced certainty to expectations on firms

“During our IAF consultation, the broad consensus was that the IAF will provide clarity of responsibilities, which will underpin sound governance across the financial sector, enhancing the culture of accountability in firms, and bring clarity to individuals in respect of the standards of conduct they are expected to meet.”

Reflecting on the successful consultation process for IAF in particular, Governor Makhlouf noted industry engagement: “A frequently raised comment in the consultation was that the number and scope of Prescribed Responsibilities is significant. To address these comments, we have reviewed and reduced the number of responsibilities while maintaining overall coherence.

“We have decided to defer the application to INEDs/NEDs by one year to enable both the Central Bank and regulated firms to learn from the introduction of the new framework to executives in the first instance as well as how we will use the framework to inform our supervision. In particular, a twelve month learning period should enable firms to better manage the issues some have identified in reconciling the collective responsibility of boards with the new individual accountability regime.”

Recognising a changing financial system, the Central Bank is today launching a consultation [LINK] which outlines how the Bank intends to evolve and deepen its approach to innovation engagement. The consultation includes enhancements to how the Innovation Hub operates and a significant new proposal to establish an Innovation Sandbox Programme. The Sandbox will allow firms and new entrants with access to regulatory advice and support to develop innovations that promote better outcomes for society and the financial system. The proposed programme will be open to applications from all sectors of the financial system, have a transparent application process, and the Central Bank will share outcomes of all sandbox activity with stakeholders on an annual basis.

Governor Makhlouf said: “Our engagement to date has helped us to develop our public policy aims, but in a changing financial system, we need to continuously assess and evolve our approach. The proposed Innovation Sandbox Programme will engage innovators with relevant Central Bank experts. This will help firms to understand the potential regulatory implication of their innovations, while fostering innovation to meet the needs of households and businesses into the future.”

View the full text of Governor Makhlouf’s opening address to the Financial System Conference.

The Financial System Conference 2023 is streaming live on webex and recordings of the individual sessions can be viewed on the Central Bank website.

Notes to Editors

• Details of the Financial System Conference can be found here.
• Details of the Consumer Protection Code Review can be found here.
• Details of the Individual Accountability Framework consultation process can be found here.
• View Details of Consultation Paper 156 ‘Open and Engaged: Consultation on how the Central Bank engages with Innovation’.