Aggregated News From Investment Management Regulators

“Supervision has become significantly more intrusive and impactful over recent years”, Director of Financial Regulation Policy & Risk and Investment Banking Supervision (Interim), Gerry Cross

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  • In order to deliver better outcomes, the financial system needs to be more trustworthy and to better support the economic welfare of citizens.
  • Firms are slowly responding to enhanced supervision. But they need to do better.
  • Supervisory inspections have adapted successfully to the Covid-19 context.

Speaking at the A&L Goodbody Corporate Crime and Regulation Summit today (14 October 2020), Director of Financial Regulation Policy & Risk and Investment Banking Supervision (Interim) , Gerry Cross said that “Since the great financial crisis at the turn of the last decade financial regulation and supervision have evolved significantly.”  He added that “Supervision has evolved not just as a result of the lessons of that crisis. But also from other lessons we have learned; for example as concerns firms’ failures in truly protecting the interests of their customers. And also as we have enhanced our understanding of and approach to issues of money laundering and financial crime.”

Mr Cross described the role of the supervisor as one that is designed to “challenge the firm and its managers as to what they are doing and how they are doing it. And where necessary to require that it is done differently, done better, or, at times, not done at all.”

On the Central Bank’s approach to supervision Mr Cross outlined the three key aspects as:

  1. Risk-based approach – on the basis of the combination of impact and probability we make our resource deployment decisions and decide how intensively we need to supervise different firms.
  2. Outcomes focused supervision – that financial firms and markets operate and are run in a way that achieves resilience, that the system and firms within it are trustworthy because they operate fairly and in the interests of their customers, and that markets are orderly and delivering effective price formation.
  3. Ever more effective supervision – in the Central Bank we also seek continuous improvement and to supervise more effectively. Part of this is of course driven by the strategic aim of ongoing improvement but also by the knowledge that we are a public authority with a responsibility to deliver as effectively as possible on available resources.

On the strategic priorities for the Central Bank Mr Cross said that “the issue of resilience and customer fairness arising out of Covid-19 are significant features in our ongoing supervisory strategy.”  On what firms can expect from Central Bank inspections he said “Firms can expect us to be focused, intrusive and challenging,” adding that “We expect firms to be well prepared, to be open, to be truthful and honest, to communicate clearly and to be supportive of the work of our teams.”

Mr Cross acknowledged that Covid-19 has caused disruption to the Central Bank’s onsite inspections but said that “it has given rise to adaptations and positive learnings for the future. We have learned that many aspects of onsite inspections can be successfully achieved by virtual means. We have learned that we can gain efficiencies that we might not have known about. And of course we retain the option to go onsite where that is necessary.”

Notes

Further information on the Central Bank’s supervision process is available on the website.

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