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."