I wonder if the Minister has ever considered another regulatory authority besides the Central Bank? Because of the points I made on Second Stage, the Central Bank seems to have taken on an enormous supervisory and regulatory role, in that it is not just supervising the banks but is supervising the whole financial services sector. I did not bash the bank in any unpleasant way but because it seems to have an extremely empty record in discovering breaches, would the Minister consider some other regulatory authority for policing the financial services sector? We are now going to ask the Central Bank to supervise the whole financial services sector. Is there any other body that could take some of the load off the Central Bank?
ACC Bank Bill, 1992: Committee and Final Stages.
Sections 1 to 3, inclusive, agreed to.
SECTION 4.
Question proposed: "That section 4 stand part of the Bill."
At this stage, I do not think there is. The Central Bank is involved in the prudential supervision of most of our financial institutions. I take the point made by Senator Ross that it could be overworked or over burdened. It is well worked as an organisation, but is also well tried and tested in the operation of the supervision of the banks generally. In the preparation of this legislation we were assured by the Department of Finance that the addition of ACC would not pose any difficulty for the Central Bank. I take the point made by Senator Ross earlier that the Central Bank will continue and that they will be dealing with more organisations, with the stock market and with other issues. At this stage, though, the Government believe it is better to have consistency and a system whereby the operations can run smoothly. It is better, therefore, that we continue with the Central Bank. I thank Senator Ross for his views. I appreciate his understanding of a number of these matters.
I agree with Senator O'Keeffe's remarks on the good job that ACC are doing. The Central Bank is going to have a very powerful position for the next decade. Central Banks, under European Monetary Union at European level, will be very much the power house of our whole financial drive to be within the regulations, guidelines and criteria laid down for us in Maastricht. As we debate that people will see an enhanced role for the Central Bank. I had the honour to be part of the negotiating team on monetary matters. In each member state the Central Bank has the position of being the main regulatory body. If there are other aspects Senator Ross is aware of in this regard, they must be ones I am not aware of. If I knew of any such aspect I would have them examined. As of now, people understand the regulations and the rules as they are laid down. Last week when we discussed investment matters, we were talking also of some other aspects of the role of the Central Bank. It was suggested that perhaps it was not using enough stick in regard to some of the matters it is involved in. I do not know whether that is its policy, but by and large it holds a respected and credible position. Whether the powers of regulation should be more stringent, or implemented in a more stringent way, is another matter. Senator's questioned the exchange control mechanism, asking whether they are unfair. In the other House today, there was mention of the compliance of tax evaders under the self assessment system. As we move from pre self assessment and the self assessment into the audit system we find that we need new powers and that these must be implemented more stringently than is the case of the existing powers. Perhaps the same applies in this case but at this stage we will have to stand solidly behind the Central Bank as the appropriate institution in these financial matters.
Question put and agreed to.
Section 5 agreed to.
SECTION 6.
Question proposed: "That section 6 stand part of the Bill."
I am not sure as to the reason for the increase in the number of directors. I have not got an explanation as to why it is considered necessary to bring the ACC into line with the other State bank, the ICC, who have a board of nine. It seems to be a non sequitur that the boards should be the same size.
Unfortunately, I did not get the opportunity to reply to the Senator but my colleague, Minister Flood, did. In 1987 when 100 per cent of the business of ACC was agricultural we were losing £15 million. That exposure to agriculture is very different now. Any bank moving into different methods, different ways and different markets is trying to expand on the expertise that is accessible, whether that is in the legal area, different forms of banking or the markets area. The extension of the board by two is purely to extend their range of expertise and to broaden the present board of seven, a number which is adequate in normal circumstances. The rotation system operated by the ACC will enable them to benefit from having the two additional people and their expertise. That is the main reason for the extension. I would not over emphasise the point that ICC are to have nine directors. I am more concerned with trying to get personnel with policies, with sufficient expertise to help the corporation in the new challenge with which this legislation will present them.
Regarding a question put earlier by Senator Ross, perhaps I did not spell out the issues of restructure, privatisation, joint venture or whatever. I have not been behind the door in saying that when ICC in August 1990 were examined by Stokes Kennedy Crowley as to their possibilities, Senator Ross and all of us know what the answer was. One has to position and condition any company by way of legislation, and administration before you can make decisions. Senator O'Keeffe made the valid point that to do this now would be far more beneficial in terms of the markets, apart from anything else, and then we will see what will happen later. There are a lot of options. Senators Ross and O'Keeffe mentioned some of these. Mention was made in the other House also of selling off ACC, privatising it, or of making it a joint venture with ICC, and of looking at the broader areas of the Trustee Savings Banks though there are difficulties in regard to the latter. These are all possibilities and we are very anxious, in the Department and the Government, to examine them. I have so stated publicly on a number of occasions in recent weeks. I have restructured the board in ICC and now in ACC on the clear understanding of where we are going and I have also agreed the orders from 1 June for the Trustee Savings Banks which is as far as I can go under the legislative powers. I hope that answers the Senator's point.
Yes, it does. I simply did not hear, so I may be wrong, what the Minister said about the item on other emoluments. The question of directors fees is always a slightly thorny one in the semi-State area. My understanding is that their fees are only £4,000 a year between them — £550 each. There is an item here — other emoluments, £107,000. I think we have a problem here. The Minister is saying that maybe there should be areas of other expertise which is quite fair, in an expanding company of this sort or in a company which is branching out into new areas but on the other hand, one wonders how much of a role these directors really play in the workings of these companies, not just because they are Government appointees but because they are paid so little they cannot be expected to play an enormous role. What are these "other emoluments"? The Minister said they were bonuses but I did not understand if they were for staff or directors or whether they were incentives.
The emoluments relate to a bonus scheme for the other staff. It is nothing to do with the directors. It is a bonus scheme that has been implemented over the last while; I do not know if it is over a number of years or only this year. This bonus scheme was brought in is an inducement to motivate and encourage the staff. It is totally distinct from the directors' fees.
I understand that the boards of both the ICC and ACC as distinct from many other State boards have met fairly often. This may have been because the companies were facing difficulties over the last few years. I understand from being at the Cabinet Table for the last few years that they have put in a great deal of work. In normal times directors of State companies may not put in a great deal of work but, as I said, because of difficulties facing these the companies, the directors, meet regularly.
Question put and agreed to.
Sections 7 to 14, inclusive, agreed to.
Title agreed to.
Bill reported without amendment and received for final consideration.
Question proposed: "That the Bill do now pass."
May I thank you, a Chathaoirligh, for facilitating the arrangements and particularly Senator Ross, Senator Ó Cuív and Senator McDonald for their co-operation in debating and getting the Bill through the House swiftly. It will, overtime, assist in the restructuring of ACC, it will give a new profile. I agree with what has been said, that fundamental changes are being made, but I think it will motivate the over 300 hundred staff involved in ACC. I appreciate the House's co-operation.
Question put and agreed to.
When is it proposed to sit again?
It is proposed to sit on Tuesday, 14 April, 1992 at 2.30 p.m.
Sitting suspended at 5.35 p.m. and resumed at 6 p.m.