Risks, regulations and ramifications

In conversation with Colm Kincaid

How can financial firms adapt to a changing environment as they face an array of challenges, from COVID-19 and increasing regulatory complexity, to conduct risk, Brexit and more.

This is a short excerpt from the full interview available to download as part of FinSight magazine.

Q: 2020 was a difficult year for us all. How has the Central Bank responded to these challenges in terms of its supervisory mandate?

For the Central Bank of Ireland, as for other organisations, 2020 required us to react quickly to emerging events and target our interventions appropriately to the evolving situation. This is nothing new in principle for us of course, as our approach to supervision is always to be risk-sensitive and, in my own field of securities markets supervision, events move at an especially and increasingly swift pace in any event. What was new was the particular logistical challenge of managing the situation in a remote working environment. This included supervising firms remotely in a manner that ensured we remained assertive and challenged firms on how they were dealing with the situation.

One thing I did observe was the extent to which the issues that emerged over the course of 2020 mapped to the priority areas of concern that we had previously highlighted. This is not to claim any special prescience on our part about the events of 2020. Rather, I think the impact of COVID-19 and Brexit threw the issues and vulnerabilities we had been highlighting for some time into especially sharp relief. Many of these are about the basics of good governance, systems and controls and proper resourcing within Irish-regulated entities. To take a sector where there was a particular COVID and Brexit focus – the funds sector – we had already planned specific supervisory reviews of liquidity risk management and compliance with our framework for fund management companies’ governance, management and effectiveness. These topics became absolutely central to the discussions we had with firms as they weathered the challenges of 2020. 

Colm Kincaid, Director of Securities and Markets Supervision at Central Bank of Ireland

Read the Central Bank of Ireland’s Securities Markets Risk Outlook Report here. 

Read ‘In conversation with Colm Kincaid’ in full
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