Ireland has some way to go to comply with an EU anti-money laundering (AML) directive, according to Cyril Roux, the new deputy governor and head of regulation at the Central Bank of Ireland.
Speaking at the Financial Services Ireland annual dinner in Dublin last night, Mr Roux said the regulator would “continue to focus” on anti-money laundering compliance.
“In early 2016, the Financial Action Task Force will review our compliance and Ireland has much to lose if its adherence with the highest standards of anti-money laundering procedures is left open to doubt or criticism,” Mr Roux said.
“Our current self-assessment is that we have a distance to travel in this area if we are to reach international standards or best practice. It is likely that the current IMF review will concur with this view. It is therefore important that we continue to focus on this area.”
Mr Roux recently took charge of financial regulation at the Central Bank and this was his first major public speech since taking office.
Adequate levels
He commented briefly on the balance sheet assessments (BSA) carried out recently with AIB, Bank of Ireland and Permanent TSB. All three said the results showed they had adequate levels of capital but Bank of Ireland disagreed with the Central Bank's view that it should take an additional provision of €1.3 billion relating to its Irish mortgage book, commercial loans and defaulted loans.
Mr Roux defended the Central Bank’s decision not to publish the results of the assessments “as to do so would be inconsistent with the broader European approach”.
He said enforcement would remain an “integral part” of the Central Bank’s strategy and noted that it had issued fines totalling €8.4 million last year.
He concluded: “Past failures are still very much with us. And the last few months have uncovered new instances of ill-advised underwriting and debatable provisioning judgments, ineffective internal and external auditing or follow-up to such auditing, and weak governance in areas across all of the financial sector that remain still too frequent for comfort or complacency.”
