On 9 March 2023, the Central Bank (Individual Accountability Framework) Act 2023 (the Act) was enacted. This Act provides for the introduction of the Individual Accountability Framework (IAF or the framework), which is designed to improve governance, performance, and accountability in firms providing financial services to individuals and businesses.

It does this by establishing a framework of enhanced clarity as to who is responsible for what within firms.

The Act empowers the Central Bank to issue Regulations requiring that key tasks and responsibilities be assigned. And it clarifies the standards to be met by individuals having these responsibilities, with a particular focus on senior executives.

Poor governance, lack of consumer-focused cultures and weak structures of accountability within firms were among the issues we set out in our Report on the Behaviour and Culture of the Irish Retail Banks, in which we proposed the IAF to address the serious issues we had identified in the financial sector.

The objective of the Act is to achieve better outcomes: for consumers and users of financial services and for the ongoing functioning of the economy. It does this based on supporting firms in being well run and having sustainable business models.

The framework is built on the twin pillars of proportionality and reasonable expectations. Our approach to implementation also embeds these features.

The Irish financial system serves not only the Irish but also the European and global economies. The new framework, implemented in a high quality manner, should support the Irish financial system in further fulfilling this role while ensuring further protection for consumers and investors.