Starling Insights Editorial Board
Yesterday, the Central Bank of Ireland (CBI) introduced a three-month consultation on key aspects of its Individual Accountability Framework (IAF), including the publication of draft regulations and guidance. This comes following the enactment of the Central Bank (Individual Accountability Framework) Bill 2022 earlier this month.
The consultation clarifies expectations regarding the Senior Executive Accountability Regime (SEAR), which requires firms to set out where decision-making and responsibility sit within senior management.
It also establishes new Conduct Standards, compelling bank employees to act honestly and in the best interest of customers. Senior leaders will have additional conduct standards related to running the business area for which they are responsible.
Lastly, it proposes changes to the current Fitness & Probity (F&P) Regime, clarifying firms' obligations to certify that individuals in certain positions are fit and proper for their duties.
The Deputy Governor of the Central Bank of Ireland, Derville Rowland, stated that the framework will "underpin sound governance across the financial sector" by setting out the good practices expected of firms and role-holders, as well as their personal accountability in this regard. "As regulators, our approach to implementation of the framework will be founded on the principles of proportionality, predictability, and reasonable expectations, underpinned by effective enforcement," she added.
Starling recently published "The Era of Accountability," a Deeper Dive supplement to our 2022 Compendium, which discusses the global push from regulators, politicians, investors, employees, and the public to hold corporate leaders accountable for the (mis-) management of culture and conduct risks. This Deeper Dive is only available here on Starling Insights.
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