, familiarity and convenience, they can continue to be considered separately. the operation of the f & p regime, including the f & p gatekeeper function and the systems in place to support the f & p regime, will remain substantially unchanged. while the f & p standards are relevant to assessing individuals prior to their appointment ( and on an ongoing basis while performing the controlled function ), the conduct standards only apply once the individual is in the role. the iaf also introduces a number of enhancements to the f & p regime to, amongst other things, strengthen the onus on firms and holding companies to proactively certify that individuals in controlled functions are fit and proper on an ongoing basis, and to address some current limitations of the f & p investigative function. the need for firms to take ownership central to successful implementation – and driving a permanent uplift in governance standards – is the need for firms to take real ownership of the framework. this will make the fundamental difference. if firms embed the framework properly, it should ideally result in fewer serious issues in the sector over time – and, from our perspective, less need for enforcement actions. our approach to enforcement – both in relation to the iaf and more generally – is based on the key concepts of proportionality and targeted deployment with a rigorous focus on outcomes. enforcement is a critical component of our regulatory framework – but just one component. we have a broad range of powers, and we escalate as appropriate depending on the scale and gravity of an issue. we think of it like a pyramid, whereby, at the wide base, we most commonly use our soft powers of education, persuasion and similar to promote compliance. further up – and less frequently used – are our ‘ hard powers ’. nearing the peak are the more punitive measures, such as administrative sanctions. we use those powers judiciously and sparingly, but we will act where warranted. i provide this context to again underscore an important point : the iaf, in our view, is about encouraging the good, not just focusing solely on stopping the bad. while robust enforcement action will continue to underpin our powers, we would far rather that firms focus on preventing, identifying, and acting upon issues in the first place - and we believe the iaf will assist firms in that purpose. implementation and next steps while the key components of the iaf have been communicated for some time, we recognise that firms and holding companies will need time to

many of you here this morning, and i emphasise the central bank ’ s desire to hear your views. both in this consultation exercise, and on an ongoing basis, we want to hear from stakeholders on how the iaf is working and how it might be improved. to help that discussion, i will briefly outline our proposed approach to implementation as set out in the consultation paper, including the rationale for key aspects of the iaf, and next steps – which i know is a major focus for firms and professional advisors in the period ahead. background the iaf had its genesis in our report on the behaviour and culture of the irish retail banks, which identified poor governance, lack of consumer - focused cultures, and weak structures of accountability within firms. 2 those findings were consistent with issues we had seen in the wider financial services sector. these issues were not unique to ireland. as noted by the bank of international settlements, “ two lasting imprints of the great financial crisis were widespread failures in corporate governance and systemic breakdowns in corporate accountability and ethics ”. 3 it is important to acknowledge here that most firms and individuals aspire to high standards. that is why we have said that the majority of firms and staff will see nothing to fear in the iaf - because its principles are ones to which they already adhere. nevertheless, the minority who do not aspire to such high standards cause reputational issues for the sector as a whole, and pose a risk to consumers, investors and wider society. hence, we proposed the iaf with a view to driving improved governance and accountability across the sector. in doing so, we emphasised from the outset that effective culture is, in the first instance, a matter for each individual firm to define, embed and own. as a regulator, we work to monitor, assess and influence culture within firms to guard against risk and drive better outcomes for consumers, investors and the system as a whole. we worked closely with the department of finance to progress the proposals, and on 9 march, the central bank ( individual accountability framework ) bill 2023 was enacted. shortly after enactment, we launched a three - month consultation on implementation of the iaf, including the publication of draft regulations and guidance. the act provides for the introduction of the iaf, which is designed to improve governance, performance, and accountability in firms by establishing a framework of enhanced clarity as to who is responsible for what within firms. it also clarifies the standards to be met by individuals holding