When it comes to regulating financial services firms, the Central Bank has the following responsibilities:
Authorization requirements: To provide financial services in Ireland, firms must be properly authorized (also known as a license). The Central Bank monitors which firms and individuals are allowed to enter financial markets, ensuring that they meet certain standards before being permitted to provide products or services to consumers.
Prudential requirements: Prudential requirements or prudential regulations are rules imposed by the Central Bank on financial services firms. These rules are intended to ensure that businesses are financially sound and safely managed. Prudential regulation requires businesses to manage risk and maintain adequate capital (or cash reserves) for their operations. This is the most basic level of consumer protection.
Conduct of business requirements: The Central Bank monitors firms to ensure that they follow business conduct rules that ensure you are treated fairly when you purchase a financial product or service.

Central banks regulate firms, particularly financial institutions, to maintain stability, protect consumers, and ensure a healthy economy. They enforce regulations and supervise firms to ensure they operate within legal and ethical guidelines. Key measures include:

1. Licensing and Registration: Firms must meet strict requirements to operate legally.
2. Capital Adequacy Requirements: Central banks set minimum capital reserves to ensure firms can absorb losses and avoid insolvency.
3. Monetary Policy Implementation: They regulate interest rates and liquidity to influence credit and borrowing.
4. Risk Monitoring: Firms are required to manage risks, such as credit, market, and operational risks.
5. Compliance and Audits: Regular inspections and reporting ensure firms adhere to laws.

By regulating firms, central banks safeguard economic stability and public trust.