Central Bank to retain penalty powers under new EU rules
Published 15/04/2014 | 10:46
THE CENTRAL Bank will retain the power to impose penalties on a member of a bank board under new common EU banking rules.
Financial Regulator Cyril Roux said this morning that while the European Central Bank (ECB) will become Europe's banking supervisor, it will not have a sanctioning role in relation to individuals.
The ECB will have the power to impose fines on banks that breach EU capital rules. The Central Bank will be able to impose fines on "less significant credit institutions".
He said that while the enforcement process may feel different and some of the sanctions will be different, the approach by the ECB and Central Bank will be largely the same.
The ECB becomes the single supervisor of European banks later this year under the EU's ambitious banking union plan.
"SSM (Single Supervisory Mechanism) implementation represents a considerable challenge within a demanding timeframe, but it is undoubtedly a positive step in banking supervision for Ireland, for the Eurozone, and for the EU as a whole," Mr Roux told a conference organised by Deloitte.
Prior to the ECB taking on its supervisory role, banks across Europe will be subject to stress tests in the autumn.
Mr Roux said banks will have to pass capital thresholds of 8pc for the baseline scenario and 5.5pc for adverse conditions.
He said the SSM regulation sets out the division between the ECB and national central banks. He said changes may be required to domestic financial law here.