I propose to take Questions Nos. 278, 279, 281 and 282 together.
The system for monitoring and supervising significant financial institutions has changed fundamentally in the last number of years and continues to evolve. The Single Supervisory Mechanism (SSM), the new system of financial supervision comprising of the European Central Bank (ECB) and the national competent authorities of participating EU countries, including the Central Bank of Ireland, represents a sea change in advancing financial integration and stability in Europe.
Under this new system of supervision, the SSM identifies and addresses risks at an early stage and is able to take suitable countermeasures. The SSM requires banks to give due consideration to a broad range of relevant factors when designing their business models including capital, liquidity, leverage, interconnectedness and systemic significance and structure. It has led to considerably more and higher-quality capital for banks; new standards for liquidity reserves and indebtedness in banks; and considerably stricter risk management and governance requirements.
In agreeing the structure of the SSM, EU member states, including Ireland, were satisfied that the exposure of European banks to lending in any sector of the economy is monitored and addressed under this new joint supervisory framework.
Also, the Eurogroup regularly considers Europe-wide economic and financial matters and discussions have included issues such as emerging risks in the international arena, including fluctuations in the price of oil. There are also opportunities for similar discussions when I meet with my European ministerial colleagues in the Economic and Financial Affairs Council (Ecofin).
Fluctuations in the price of oil is one of the risks monitored by my Department. As such, we are cognisant of any impacts of such fluctuations on the economy. In addition, my officials regularly meet with their counterparts in the Central Bank to discuss operational matters, including risks faced by the financial sector. Indeed, the International Monetary Fund (IMF) is currently undertaking a Financial Sector Assessment Programme (FSAP) that focuses on the risks and vulnerabilities to the sector, which included extensive discussions between my officials, Central Bank officials and the IMF. The outcome of the FSAP is expected to be published in the coming months.