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Ireland: Law of Offshore

Banking Law

The previously mentioned Financial Services Regulatory Authority regulated the banking industry under the Central Bank and Financial Services Authority of Ireland Acts 2003 and 2004. Regulation reverted back to the Central Bank after the coming into force of the Central Bank Reform Act, 2010. Banks need licences from the Central Bank unless they are already authorised in an EU member state under the Second Banking Directive 89/646/EEC, in which case they have to comply with certain administrative and information requirements. A non-EU bank will need to have an Irish subsidiary in order to apply for a license.

The Central Bank's guidelines for issue of a license were as follows:

  • The applicant has an acceptable legal form;
  • The corporate structure of the group of which the applicant is part, or its relationship with other undertakings under common control, is clear and transparent and is not such as may result in the bank being unable to effectively exercise its supervisory responsibilities;
  • The applicant has clearly-defined and adequately-researched objectives and proposed operations which are consistent with the safety of depositors' funds, prudent banking practices and fair trading in banking;
  • The applicant will be independent of dominant personal and commercial interest;
  • There will be cohesion, continuity and consistency in the manner in which the business of the credit institution is directed by its owners;
  • The beneficial ownership of the credit institution is such as will ensure a capacity to provide such new capital for the credit institution as may be required in future;
  • There is a willingness and a capacity on the part of the credit institution to comply with the Bank's licensing and provision requirements on a continuous basis

The Central Bank applies various other reporting and prudential rules to all banks, although these are considerably moderated as regards EU banks qualifying under the Second Banking Directive.

 

 

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