Irish Economy
IMF says Central Bank of Ireland independence should be strengthened
By Finfacts Team
May 28, 2014 - 8:35 AM

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The International Monetary Fund (IMF) in a report published on Tuesday has recommended that Central Bank of Ireland legislation should be amended to detail the framework for Central Bank independence. It also said legislation should address reasons for removal of commission (board) members, which should be similar to what applies for the governor.

The Government said in its response: "The Irish authorities are pleased to note that there was no observed political interference with the Central Bank of Ireland. While we are disappointed with the IMF finding regarding CP2 (Core Principle 2 in the report), we note that this relates to hypothetical concerns regarding a small number of legislative provisions from within the corpus of Irish financial services law, rather than any manifest experience of the Central Bank’s statutory or regulatory independence being compromised."

The IMF report says there are impediments to the bank attracting and retaining high calibre staff and said changes to its pay structure was needed to deal with the difficulty in recruiting and retaining appropriate skills.

It also said officials should make more use of on-site inspections and pursue all of its available enforcement authority, including criminal prosecutions.

In a statement, the Central Bank said it welcomes the publication by the IMF of the Report on Observance of Standards and Codes and the two Detailed Assessment Reports. "In view of the substantial changes in the regulatory regime in Ireland over the last four years, these reports provide a timely examination of Ireland’s legislative and supervisory frameworks in relation to banking (assessed against the Basel Core Principles for Effective Banking Supervision) and markets regulation (assessed against the IOSCO Objectives and Principles of Securities Regulation). It confirms high levels of compliance with the requirements while also identifying some areas for further review. 

The Central Bank has evaluated the IMF’s recommendations and will take appropriate action to address these findings."

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