Financial regulator Matthew Elderfield has repeated his call for further measures to be put in place to ensure bank balance sheets reflect underlying risks more accurately.

Speaking at the MacGill Summer School in Glenties, Co Donegal, this afternoon, Mr Elderfield said his office would require banks to ensure any potential impairment from future disposals "is recognised as fully and as early as possible".

The regulator also backed continuing support for struggling mortgage holders and reform of bankruptcy laws.

Mr Elderfield admitted that although progress has been made in terms of restructuring the banks, there are further steps required. However, he highlighted a number of

positive developments including improving standards of governance in financial institutions.

"By reforming the banking sector – and strengthening financial regulation more generally by closing gaps in governance and probity standards, implementing a new risk assessment framework and adopting forthcoming legislation on new powers – through these measures Ireland can rebuild its reputation as a financial centre based on strong regulation," he said.

Mr Elderfield said the issue of mortgage arrears continues to be an important focus for the Central Bank.

"I recognise the stress and anxiety that mortgage arrears, or even the imminent threat of mortgage arrears, is having on the day-to-day lives of many people," he said.

The regulator said plans to finalise the revised Consumer Protection Code on mortgage arrears should be completed by the autumn. In addition, he said, now the banks are being "conservatively capitalised" they would have more capacity to restructure debts if and when required.

"Any approach to restructuring needs to take account of the risk that it creates incentives for borrowers to cease meeting their obligations. But despite these considerations there is now more scope for the banks to take individual decisions, based on the particular circumstances of the borrower, to restructure debt."

Mr Elderfield added he was encouraged by the Government's commitment to reform "antiquated" bankruptcy laws.

"Allowing a statutory but non-judicial debt settlement mechanism would be a welcome reform and allow borrowers to earn a fresh start by discharging their debt after a reasonable period," he said.