Ireland's central bank will raise the amount of capital that banks must set aside as extra protection against future crises as planned but does not envisage further increases, it said on Wednesday.

The counter-cyclical capital buffer (CCyB) will increase to 1.5% from 1% from June 2024 after a 12-month phase-in period, the bank said as part of its Financial Stability Review. The bank said last year that such a move was likely.

The increase "leaves us at the rate set out in our macroprudential strategy last June, above or below which we will move when we deem that cyclical risks are either particularly elevated, or particularly subdued," Central Bank Governor Gabriel Makhlouf said in a statement.

The Central Bank regards 1.5% as the "neutral rate" for CCyB, Director of Financial Stability Mark Cassidy said.

In its Financial Stability Review, the bank said that despite tail risks, the banking system had ample headroom above regulatory requirements in both capital and liquidity, with high levels of cash reserves.

Irish households and businesses are proving resilient to the inflationary shock so far and if the economy continues to evolve in line with expectations, "we are likely to see only modest increases in financial stress among domestic borrowers," the review said.

The Irish economy "has continued to surprise with its resilience," Makhlouf said. (Writing by Conor Humphries; Editing by Bernadette Baum)