Irish Central Bank Reform Law Enacted

by Jason Gorringe, Tax-News.com, London

05 October 2010

The Irish Minister for Finance, Brian Lenihan has signed a Commencement Order bringing the Central Bank Reform Act 2010 into immediate effect.

The Central Bank Reform Act 2010 is the first of a three-stage legislative process to create a new fully-integrated structure for financial regulation in Ireland.

The Act includes provisions for:

• The application of a fitness and probity regime to those occupying key positions within financial service providers;
• A relaxation of the lending limits set out in section 35 of the Credit union Act 1997 in an effort to facilitate borrowers who have run into difficulties in repaying their loans and need to have them rescheduled to allow for repayment over a longer period of time. The new lending limits are accompanied by measures to balance the increased flexibility in relation to rescheduling.

A second Bill, to be published during the autumn legislative session, will enhance the powers and functions of the restructured Central Bank in relation to:

• The prudential supervision of individual financial institutions;
• The conduct of business, including the protection of consumer interest; and
• The overall stability of the financial system.

A third Bill will consolidate the existing statutory arrangements for the Central Bank and financial regulation in the State.

Lenihan said: “The commencement of the Central Bank Reform Act 2010 is an important step in the government’s reform of financial regulation. It puts in place a domestic regulatory framework for financial services that is focused on rebuilding confidence in the stability of the financial system. The new Central Bank will be better placed to supervise financial institutions and markets and to safeguard the interests of consumers and investors.”

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