Ireland's banking regulator has published a set of guidelines to describe its approach to punishing firms.

Although the paper, entitled ASP Sanctions Guidance, is non-binding, the Central Bank hopes that it will help the banks in its purview to comply with its rules.

Proven dishonesty is always at the most serious end of the "spectrum of gravity," as the central bank quaintly puts it. If a contravention involves dishonesty and/or was committed deliberately, the matter will ordinarily view the matter as "more serious."

In general, the regulator will treat contraventions that occur over a longer period or with greater frequency than others as "more serious." (Vague wording is a hallmark of the paper.) However, it might view a one-off contravention as very serious, depending on other factors such as the amount of any benefit gained or loss avoided due to the contravention, the effect or potential effect on the orderliness of financial markets, the detriment caused to consumers, customers or investors, or other relevant factors.

Even if the bank does not realise a benefit from its wrongdoing, or fails to avoid a loss, the regulator might still take the potential benefit or loss into account.

The speed, effectiveness and completeness with which the regulated entity confesses its contravention(s) to the Central Bank (or any other regulator) is another factor. Without infringing their constitutional rights, including their privilege against self-incrimination, regulated entities must be open and co-operative with the Central Bank, which will ordinarily treat a failure to report a contravention in full as an aggravating factor.

Examples of this include (but are not limited to) instances where the regulated firm:
(a) knew about the behaviour that constituted the contravention, but failed to report it;
(b) wilfully withheld information about its wrongdoing;
(c) failed to report the contravention(s), despite it/them being obvious;
(d) failed to report the contravention(s), despite it/them continuing for a lengthy period of time;
(e) failed to report the contravention(s) within a reasonable time after it/they came to its attention; and/or
(f) failed to tell the Central Bank about the full extent of the wrongdoing, as it knew it at the time of reporting.

Exemplary "self-reporting" (a phrase that the Central Bank uses only once and never defines) is a mitigating factor. This can take the shape of:

(a) disclosure of all relevant information known to the bank;
(b) an attitude of "constructive engagement" (again, unexplained);
(c) a willingness to facilitate the Central Bank’s investigation in whatever way possible;
(d) the submission of a report as soon as the contravention comes to light;
(e) reporting in circumstances where the contravention is serious and is likely to attract severe punishment; and
(f) the identification of other contraventions.

There is a limited amount of regulatory bluster in the paper, which contains no policy regarding redress or compensation. The guidelines cover sanctions imposed on firms and individuals under the Central Bank’s Administrative Sanctions Procedure or ASP, as governed by Part IIIC Central Bank Act 1942.