The Financial Regulator has expressed concern that "false and misleading" rumours circulating in the financial markets in recent days are "connected to unusual trading patterns in Irish shares".
In a statement, the body said it is "examining certain transactions" on the Irish market.
Con Horan, prudential director of the Financial Regulator, said: "We are working closely with other regulators, including the UK's Financial Services Authority (FSA) in relation to concerns about this type of activity.
"Market participants who take unfair advantage by spreading false rumours while trading on the basis of those rumours are in breach of market abuse regulations and we will actively pursue those who may be engaged in this."
Central Bank governor John Hurley welcomed the announcement by the regulator.
"I strongly support the actions being taken by our colleagues in the Financial Regulator in relation to investigations into trading in financial shares over recent days," Mr Hurley said in a statement.
"As I have outlined in recent statements, the Irish banking sector remains robust and has no material exposures to the subprime market."