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The Central Bank of Ireland

Central banks normally have quite an important role in regulating and ensuring the stability of economic systems. The Central Bank of Ireland (CBOI) is no different, being Ireland’s regulator for most financial firm categories. On top of that, it was the sole Irish pound issuer before the country transitioned towards the Euro. Now it provides issuing services on behalf of the European Central Bank. It’s also worth noting that the CBOI is a part of the European System of Central Banks (ESCB).

The roots of the Central Bank of Ireland go back to 1943, when the entity started operating. However, a major turning point for the Bank was January 1st, 1972. That’s when the Central Bank of Ireland became the banker of the Government of Ireland. The change was a result of the Central Bank Act 1971, which gave the Bank a larger authority area. Before the Act, it could’ve been considered more of a currency board, but it gained full central bank status with it.

The primary offices of the Central Bank of Ireland sat in Dublin for nearly 40 years, from 1979 to 2017. The Bank was on Dame Street but closed down along with branches at Iveagh Court and College Green. In March 2017, the offices moved to North Wall Quay, with a unit ner Spencer Dock. The general public may use these two to exchange non-current currency and coinage. Those two locations are also where people can obtain high-value Euro banknotes and exchange mutilated currency.

The Bank uses the Currency Centre at Sandyford as its currency manufacturer, warehouse, and distribution site. Also noteworthy, the Central Bank of Ireland is a separate entity from the Bank of Ireland. The latter is a commercial bank.

Central Bank of Ireland Responsibilities

As a central bank and one of the country’s primary regulators, the Central Bank of Ireland has a wide array of duties. We’ve already gone over some of them in the opening passage, but we should also go slightly more in-depth. The Central Bank of Ireland primarily cares about maintaining financial system stability. It carries out regular assessments that allow it to take a proactive approach towards any emerging issues. One of the measures it might decide to take is closing a defunct institution before it causes any harm.

Besides financial systems, the Bank also plays a significant role in Ireland’s monetary policy. As such, it also contributes to the Eurosystem monetary policy as a whole. The Bank’s governor is a part of the ECB, which meets on a six-week basis to discuss monetary policy. The Central Bank of Ireland plays a role in ensuring Ireland carries out the policy decisions. On top of that, the institution also plays a significant role in securing and creating liquidity.

And as we said near the beginning of our text, the Bank also acts as a regulator for most financial firms. That means over 10,000 firms fall under the regulatory authority of the Central Bank of Ireland. The largest part of the regulation comes from risk-based supervision, guaranteed by a credible threat of enforcement. Again, the goals here are to maintain market integrity, financial stability, and of course, customer protection. The Bank carries out authorization and supervision and handles enforcement as well.

Reputation

The Central Bank of Ireland saw a blow to its reputation during the Irish Financial Crisis. Since then, it’s taken steps to address some of the primary criticisms, such as mortgage lending controls. However, other issues, such as Commercial property bubbles, still remain in place. On top of that, there are doubts about certain entities circumventing some of the new controls.

 

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