Banking sector capitalisation and asset quality are high, and profitability levels are higher than for most European competitors. The assessment also found that the overall framework of prudential regulation and supervision in the Central Bank is well developed, and shows a high degree of observation of international standards and codes.
The review noted that current developments financial sector innovation, increased competition, increased cross-border activities associated with Dublin’s International Financial Services Centre and sustained rapid credit growth - pose a considerable challenge to market participants and supervisors to maintain Ireland’s record of financial stability.