Vol. 507 No. 1
2 Mr. McDowell asked the Minister for Finance when he will publish the report of the advisory committee chaired by Mr. Michael McDowell SC dealing with the establishment of a single regulatory authority for financial services; the plans, if any, he has to implement the recom mendations of the implementation committee; and if he will make a statement on the matter.
As the House will be aware, the report to which the Deputy refers was published yesterday in order to facilitate public consideration of the issues involved.
The report was finalised by the McDowell group on 19 May 1999 and submitted to myself and the Tánaiste the following day. The report contains a considerable number of recommendations and these are now being examined in both my Department and the Department of Enterprise, Trade and Employment with a view to making recommendations to Government.
Given the importance of the financial services sector to Ireland, it is essential that we be very careful in considering the full implications of any decision in this matter.
I am confident that the Tánaiste and I will shortly be in a position to submit joint proposals to Government as regards the next steps that must be taken towards implementing the recommendations of the report.
Does the Minister agree with the view expressed last week by the Tánaiste that the recommendations in the report are convincing and that it would be foolish to ignore them?
Before asking Mr. McDowell to prepare this report the Government had agreed on the principle of establishing a single regulatory authority. Mr. McDowell and his group were asked to consider how this might be implemented. It was not possible for the group to reach unanimity on the location of this single regulatory authority. All the pros and cons are set forth in the report published yesterday and I will be giving due consideration to the matter. I hope in future to be able to send a joint memorandum to the Government on the matter and allow the Government to fully consider it.
As I said in my reply and in interviews I gave yesterday, this is a very serious matter. Ireland has an international reputation in financial regulation and we must consider the matter fully and take everything into account, something I intend doing. I do not intend recommending to the Government something which might be regarded as populist and thereby damage the long-term interest of the country. I will take all the matters into consideration, including the majority recommendation made by the McDowell group. However, I stress that the nine person committee produced three recommendations.
I anticipated that the Minister might not respond to the question and therefore, with the permission of the Chair, I wish to provide an answer. I put it to the Minister that he intends seeking, presumably in conjunction with the Central Bank, a means by which an independent regulatory authority can be accommodated within the Central Bank, which would act as a second pillar.
As I said in reply to the Deputy's earlier question, the report contains three recommendations. The majority report recommends a green field site.
The Minister should take the report as read and give a response.
I am giving my response. The second option, which was supported by the Department of Finance representative and the Central Bank representative, is that it would be a division within the Central Bank. The third option, which was put forward by the representative of the Department of the Taoiseach, is referred to as the "twin pillars" approach. The nine person group could not get unanimity on the way we wish to proceed. It was my intention not to make any comment about this matter until we brought the report to Government but it came into the public domain. Perhaps I should have expected that it would come into the public domain earlier. Perhaps the more sensible approach would have been to publish it the day I received it, but I did not do so.
I will consider all these matters. I have given an indication of the approach I will take in deciding on a final recommendation. It will be done in conjunction with the Tánaiste.
What is the point of setting up an advisory group if the Minister intends considering the matter de novo once he receives the advice? Since I failed to elucidate whether the Minister agrees with the Tánaiste, does he agree with the representative of his Department? Was his Department's representative representing the Minister's view in the minority report which he submitted?
My views about reports and advisory groups of civil servants and bodies are already on record. They may be summarised by saying that advisers advise and Ministers decide. That has been my position or wont since I first became a public representative. I will take into account the recommendations of the six persons of the nine person McDowell committee. I will also consider the other recommendations put forward there. It should not be beyond the wit of the Tánaiste and me to arrive at a satisfactory outcome.
