Central Bank publishes feedback statement on macroprudential policy for investment funds
Executive Summary
The Central Bank of Ireland (CBI) published a Feedback Statement on 23 July 2024 summarizing stakeholder responses to its Discussion Paper (DP11) on developing a macroprudential policy framework for investment funds, emphasizing the sector's growth and systemic risks. This matters for compliance professionals as it signals ongoing domestic and international efforts to enhance fund resilience amid rapid expansion of non-bank financial intermediation (NBFI), with Ireland's funds sector reaching €6.2 trillion in assets by end-2022. No immediate new rules are imposed, but it underscores evaluation of existing measures and future policy evolution. #
What Changed
- This Feedback Statement introduces no new regulatory changes or requirements; it is a summary of feedback on DP11 and CBI's perspectives on macroprudential considerations for funds. It highlights two pre-existing macroprudential measures already impl
- Restrictions on leverage and liquidity mismatch for Irish-authorised property funds (introduced prior to 2024).
- A codified minimum 300bps yield buffer for Irish-authorised GBP-denominated Liability Driven Investment (LDI) funds, requiring resilience to UK interest rate shocks, with liquid assets in the buffer and real-time notifications for deviations (effecti
Suggested Considerations
- For property funds: Continue adhering to pre-existing leverage/liquidity mismatch limits.
- All relevant managers: Monitor CBI updates on measure evaluations, conduct ongoing vulnerability analysis, and prepare for potential toolkit expansions (e.g., stress testing, data sharing). Engage in international coordination via FSB/IOSCO and EU consultations.
- General: Review fund strategies for systemic risks, update governance for macroprudential oversight, and align with CBI's DP11 principles.
Key Dates
Compliance Impact
Urgency: Medium—No new rules from the Feedback Statement itself, reducing immediate pressure, but firms must ensure full compliance with implemented LDI (by July 2024) and property fund measures while preparing for evaluations and EU-level developments (e.g., November 2024 CBI response). This matters as Ireland's funds dominance (global hub status, 16% of world financial assets) amplifies systemic
Who is Affected
References
AI-generated analysis. May contain errors or omissions — verify with the original CBI source before acting. Full disclaimer.
Summary
The Central Bank of Ireland has today (Tuesday 23 July) published a Feedback Statement to the Discussion Paper on an approach to macroprudential policy for investment funds.