On 4 March 2020 the Central Bank (CBI) issued a statement on COVID-19 indicating that it is monitoring developments closely to assess the impact on the economy and financial system. The short statement also sets out the Central Bank's expectation that regulated firms should have appropriate contingency plans in place to deal with major operational events, should they occur.

The Central Bank's expectation derives from various sources and this bulletin focuses on general cross-sectoral guidance in addition to the main industry-specific requirements for various sectors.

General requirements

Central Bank cross industry guidance requires IT risk management to address key risk areas such as disaster recovery and business continuity. Contingency plans must be tested and should ensure the recovery, resumption and maintenance of all aspects of the business. Documented analysis and complete reviews of business critical processes and interdependencies are required. Firms must consider a range of plausible event and disaster scenarios. If a quarantine of staff at home was not part of existing contingency planning firms should act now to assess this scenario to ensure readiness.

Where potentially affected business areas are outsourced firms must ensure that they have adequate governance and risk management processes in place to address outsourcing risks. Outsourcing arrangements should be reviewed with the current risk environment in mind to ensure effective risk management and continuity planning is in place.

As employers, financial services firms will be aware of their employment law obligations to employees to implement measures that maintain a safe place of work.

Credit Institutions

The EBA's Guidelines on internal governance state that credit institutions should have a Business Continuity Management plan to ensure their ability to operate on an ongoing basis and to limit losses in the event of severe business disruption. The Central Bank's Corporate Governance Requirements 2015 oblige the board of a credit institution to identify risks to be addressed by contingency plans. Credit institutions are also required to regularly review, update and test their contingency plans.

Investment Firms

MiFID II requires investment firms and market operators to take reasonable steps to ensure business continuity. Investment firms must have appropriate and proportionate systems, resources and procedures and sound administrative and accounting procedures, internal control mechanisms and effective procedures for risk assessment. In addition, they must have effective control and safeguarding arrangements for information processing systems.

Trading venues who outsource operational functions must establish, implement and maintain a contingency plan for disaster recovery and periodic testing of back up facilities.


Insurers and reinsurers particularly those operating in health, travel and other personal lines will be conscious of the potential for an increase in claims. Insurers should consider potential costs or financial losses having a liquidity impact; and have contingency plans in place. Boards must ensure the identification of risks to be addressed by their contingency plans. Contingency plans must be reviewed, updated and tested regularly.

Funds and Fund Service Providers

Regulated Funds and Fund Service Providers are required to have policies in place as part of their risk management and business continuity planning. COVID 19 may represent a significant stress testing of these policies. COVID 19 may also represent a significant stress testing of liquidity management, which has been a key regulatory focus for the funds sector in recent times. The Central Bank also expect Regulated Funds and Fund Service Providers to check and monitor BCP plans and tests of their key service providers.

What next?

The Central Bank's statement and regulatory business continuity obligations are high level. Firms will however need to work quickly to assess COVID-19's detailed impact and make a number of judgements.

For example in the securities trading space, there are requirements to tape telephone calls and to ensure that traders are adequately supervised which prevents traders working from home. Customers, however, will expect continued access to their brokers and dealers during volatile markets. However, a scenario where traders have to be sent home raises an issue as to whether compliance with regulatory obligations can be squared with customer expectations.

A closure of bank branches raises issues in the retail banking space for customers who cannot access on-line banking and for banks who are expected to treat their customers fairly.

Other issues are likely to emerge quickly which will require careful thought and handling.