The Central Bank's Publishes Its Approach To A More Effective And Efficient Regulatory And Supervisory Framework - December 2025

On 10 December 2025, the Central Bank of Ireland (Central Bank) published a report titled "Regulating & Supervising well – a more effective and efficient framework" (Report).

The Report outlines the Central Bank's approach to a more effective and efficient regulatory and supervisory framework. It builds on the Central Bank's strategy to transform regulation and supervision, including the introduction of its new integrated supervisory approach and recent improvements made in gatekeeping processes and includes a multi-year programme of initiatives to deliver further efficiencies and effectiveness across regulation, supervision, gatekeeping and reporting.

The report aligns with several European Union institutions' simplification in financial regulation agendas and outlines the Central Bank's work across four pillars as follows:

1) Supervision

In March 2025, the Central Bank introduced a new integrated, risk-based supervisory approach. The new supervisory approach brings together multidisciplinary teams, sharper risk focus, and clearer supervisory communications to deliver more coherent engagement with firms, stronger proportionality and streamlined supervisory processes. For further information please see our article on the Central Bank's new supervisory approach here. In this regard the Central Bank is continuing to:

• Refine engagement models to minimise unnecessary friction, engage with 'one voice', and focus on material risks;
• Provide more clarity and visibility in supervisory communications – including setting out its key planned sectoral thematic engagements for the year;
• Deliver a sectoral approach to supervision, focusing on the most material risks for each sector, complemented by additional supervision for the most significant firms; and
• Better live its risk-appetite and better deliver on outcomes-focused supervision, escalating as required.

2) Regulation

The Central Bank is updating its domestic rulebook, retiring or consolidating outdated provisions, and aligning national requirements with evolving EU frameworks. Some key initiatives include:

• Insurance: A major compatibility review of insurance regulations to eliminate duplication with Solvency II reforms and a review of 2021 Recovery Planning Regulations.
• Banking: In addition to international work and enhancing the process for approving new/changes to bank fees and charges, review domestic banking rules, that pre-date CRD V/CRR in light of updated EU standards to ensure consistency and relevance, including:
  • The Code of Practice on Lending to Related Parties;
  • The Policy on the Management of Country Risk by Credit Institutions; and
  • The Impairment Provisions for Credit Exposures.
• Credit Unions: Following simplification of the Credit Union Lending Framework, updating the Credit Union Handbook.
• Capital Markets and Funds: Among other initiatives, changes to the AIF rulebook and UCITS regulation and a full review of the Fund Service Provider Framework are expected.
• Cross-sectoral initiatives: These include:
  • Consolidated the Guidance on the Fitness and Probity Standards. For further information, please see our article here.
  • Updated cross-sectoral guidance on operational resilience, outsourcing and governance.
  • Conducting a three-year SEAR review (2027).
  • Consolidated consumer protection requirements domestically into a single rulebook, as part of the review of the Consumer Protection Code. For further information, please see our article here.
  • Retiring any AML related domestic publications (e.g. AML guidelines and "Dear CEO" letters) that are no longer applicable or relevant, and replace them with a single, directly applicable EU rulebook.
• Consulting on a new Regulatory Impact Assessment Framework (2026).

3) Gatekeeping

Building on improvements already delivered, including shorter processing times and clearer expectations, the Central Bank will establish a Gatekeeping Division to further enhance consistency, transparency and timeliness across authorisations and Fitness & Probity (F&P) processes. Other initiatives include or will include:

• Enhanced guidance, expectations, and engagement, including the Central Bank's Authorisations and Gatekeeping report and consolidated F&P guidance.
• Enhancing the F&P system delivering benefits and efficiencies for both industry and the Central Bank – reducing the average processing time for Individual Questionnaires (IQs) from 36 to 24 calendar days, in part through facilitating improved applications (with a 50% reduction in those returning incomplete).
• Establishing a dedicated F&P Unit, improving processing times and consistency.
• Streamlining authorisation and change of business requirements for the insurance sector.
• Deepening the expertise and improving its responsiveness and clarity at the gate.
• Reviewing the Pre-Approval Controlled Function (PCF) framework to reduce administrative load while maintaining clarity of responsibility. This review will propose changes to align with a review of the Senior Executive Accountability Regime in 2027.
• Improving technology and systems related to authorisations.
• Clarifying authorisation processes for funds, intermediaries, prospectuses, and market participants.
• Increasing transparency on timelines and expectations.

4) Reporting and Data

The Central Bank is reviewing domestic reporting requirements, introducing a discipline-by-design model to ensure all data collections are purposeful, proportionate and non-duplicative. This work aligns with European initiatives to streamline bank reporting and reduce unnecessary burden.

Roadmap for Delivery

There is a Roadmap for Delivery appended at page 18 of the Report. For further information, please see the Central Bank website here.

Contributed by Jane Balfe

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