| 17.6°C Dublin

Central Bank to promote 'improved financial culture'

THE Central Bank has said its major priorities for the next three years include promoting a "better culture in the financial sector" and helping restore consumer confidence in financial firms.

These are set out in Central Bank Governor Patrick Honohan's strategic plan for 2013 to 2016, published yesterday.

They include taking the impact of banks' strategies for dealing with problem mortgages into into account in bank "stress tests" planned for next year

The priorities include restoring financial stability to the banking system, regulatory reform, including better consumer protection, and influencing international policy-making.

The Central Bank said it expects to see a reduction in resources from 2015. That will be thanks to greater efficiencies and as the fallout from the banking crisis recedes

The Central Bank has been in constant expansion since 2009, when Prof Honohan was appointed governor in the wake of the banking collapse. The expansion phase came as "light-touch regulation" gave way to more hands-on management of banks and other financial firms. This has meant recruitment of new staff has been almost constant since 2009.

In tandem with yesterday's strategy statement, the Central Bank has invited regulated banks and other financial firms to join a consultation process on how they are made to pay for the regulator.

Around 50pc of the cost of overseeing the financial sector is paid for by direct charges levied on banks, building societies, insurers and other financial firms.

The Central Bank is proposing a system of setting common fees for all types of regulated institutions.

Meanwhile, banks got a boost yesterday after a Canadian rating agency lifted its rating for short term Irish government debt.

It means banks can borrow more from the European Central Bank when they post the short term treasury "bills" as collateral.

Irish Independent