Central Bank governor John Hurley has called for greater transparency between on- and off-balance sheet vehicles owned by financial institutions.

Speaking to ACI Ireland, the financial markets association, in Dublin yesterday evening, Mr Hurley said the lack of accurate information on underlying risks has been a significant factor in triggering the loss of investor confidence during the recent turmoil in the financial markets.

"We need more information on how risks are managed and priced," said Mr Hurley.

He said there were clear indications that the treatment of non-regulated entities and a review of deposit insurance schemes would be part of discussions at international level.

The issue of regulating off-balance sheet entities emerged in August when Ormond Quay, a Dublin-based subsidiary of German state bank Sachsen LB, was no longer able to issue short-term financing in the commercial paper market, almost leading to the collapse of the German bank.

Mr Hurley said Irish banks and financial institutions did not have significant exposure to the subprime market, in which loans are provided to people with poor credit histories.

He said they had "good shock absorption" to deal with risks coming from the heightened stress in the financial markets.

"Our stress-testing of the banking system and our extensive financial stability analysis indicates that Irish banks are solidly profitable and well-capitalised," said Mr Hurley.

He said it would take some time before confidence returns to the market and the broader economic impact of the market turmoil could be assessed.