I understand the Deputy is referring to the recent report by the Comptroller and Auditor General entitled Central Bank Financial Regulation, report no. 34 of December 1999. This report was submitted to me by the Comptroller and Auditor General on 18 January last and was published on the 2 February. I understand the next step would be for the Committee of Public Accounts to consider the report.
This report was the outcome of a detailed examination by the Comptroller and Auditor General into the systems, procedures and practices employed by the Central Bank in the discharge of its role as the main regulator of the financial services sector in Ireland. The report was comprehensive and provided a clear and useful guide to the way in which the Central Bank carries out its function as a financial services regulator. Overall, the report notes that current international practice is followed by the Central Bank for prudential supervision.
The Central Bank currently has responsibility for some 1,000 financial institutions and 2,000 collective investment schemes. The bank has a proven record in pursuing the mandate of prudential regulation, which is to ensure that individual financial institutions comply with a set of rules which are designed to ensure their continuing solvency and liquidity – prudential supervision; that risks to the financial system as a whole are minimised – systemic supervision; and that there is a degree of protection for depositors with credit institutions and for clients of investment firms – conduct of business supervision.
Regulation in a dynamic, complex and evolving sector is a process which must be continually reviewed and brought up to date. The Central Bank is very conscious of this requirement and it has welcomed this review of the process. The report puts forward some positive suggestions as to how the regulatory process could be enhanced and the Central Bank has indicated that it is fully prepared to take on board and implement the various suggestions for improvement contained in the report.
Following examination of the report by the Committee of Public Accounts, the board of the bank will consider any recommendations of the committee. I would be prepared to consider any legislative changes that may be required to implement any of the recommendations in the report or the recommendations of the Committee of Public Accounts.