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Seanad Éireann debate -
Thursday, 22 Jan 2015

Vol. 237 No. 3

Central Bank (Amendment) Bill 2014: Committee and Remaining Stages


I move amendment No. 1:

In page 3, between lines 25 and 26, to insert the following:

“(ahc) to the Committee on Public Accounts,”,”.

In the spirit the Minister has just described, which is unanimous throughout the House in the context of the Bill, would it be of use - as suggested in amendment No. 1 - to give the Governor of the Central Bank the power to supply information, should he so wish, not only to special inquiries but also to the Committee of Public Accounts? The latter is a permanent committee and has its own support apparatus in place, whereas it took some time to establish the Joint Committee of Inquiry into the Banking Crisis. The Committee of Public Accounts has reported on the activities of the Central Bank in the past. In 2012 it prepared 276 questions for the Central Bank regarding events relating to the banking crisis. As the Minister is a former Chairman of the Committee of Public Accounts, I am of the view he is best placed to judge whether this amendment accomplishes anything in terms of openness with regard to banking matters and the Oireachtas.

I will read into the record the speaking note with which I have been provided, which places the Senator's amendment in context.

The Central Bank (Amendment) Bill was published in direct response to an issue that was raised by the Joint Committee of Inquiry into the Banking Crisis in its relevant proposal and the subsequent recommendations of the Committees on Procedure and Privileges of Dáil and Seanad Éireann. Having taken legal advice, the joint committee sought the amendment of section 33AK for the purposes of the banking inquiry and a terms of reference resolution in this regard, under the Houses of the Oireachtas (Inquiries, Privileges and Procedures) Act 2013, was passed by both Houses. Accordingly, and as specified in the Long Title to the Bill, the gateway being inserted into section 33AK is specific to the joint committee only and is not intended to cover any other committee of inquiry. Furthermore, the capital requirements directive, which authorises the disclosure of certain confidential information to parliamentary inquiry committees, includes specific conditions on the disclosure of such information to the effect that, "(a) the parliamentary enquiry committee must have a ‘precise mandate’ under national law; (b) the information must be ‘strictly necessary’ for fulfilling that mandate; (c) persons with access to the information are subject to professional secrecy requirements under national law at least equivalent to those referred to in [the directive]".

The Committee of Public Accounts is a standing committee of the Dáil and is responsible for examining and reporting on reports of the Comptroller and Auditor General in respect of departmental expenditure and certain other accounts. It also considers the Comptroller and Auditor General's report on his or her examinations of economy, efficiency, effectiveness, evaluation systems, procedures and practices. It should also be noted that the Central Bank of Ireland does not come within the remit of the Committee of Public Accounts in respect of its accounts. The information covered by section 33AK of the Central Bank Act 1942 does not relate to departmental expenditure or accounts which fall within the remit of the Committee of Public Accounts. Instead, it relates to the treatment of confidential information acquired by the Central Bank in the performance of its functions and the requirement to maintain professional secrecy under the Treaty of Rome, the European System of Central Banks statute and the supervisory EU legal Acts.

For the reasons I have outlined, I do not propose to accept the amendment. The net point is that the provision in the Bill must, of necessity, be very narrowly focused and confined to the inquiry. Its terms must not be widened in order that committees such as the Committee of Public Accounts might make use of it.

I thank the Minister for his reply.

Amendment, by leave, withdrawn.
Government amendment No. 2:
In page 3, to delete line 26 and substitute the following:
“(b) in subsection (6), by inserting “and in the ESCB Statute” after “legal acts”, and”.

Under Article 2.1 of the Council Decision 98/415/EC I am required to consult the ECB formally on any new legislative provisions relating to the Central Bank. The ECB has made the point that the scope of section 33AK(6) of the Central Bank Act 1942 should be broadened to comply with Article 37.2 of the Statute of the European System of Central Banks, known as the ESCB. At present, section 33AK(6) refers only to the obligations for professional secrecy in the supervisory EU legal acts in respect of the onward transmission of information but does not refer to the secrecy obligations under the ESCB statute. Therefore, I am bringing forward this amendment to broaden the scope of section 33AK(6) to include the ESCB statute. Members will recall that in my Second Stage speech I said that this arose after consultations with the ECB which proposed that we would make this amendment.

Amendment agreed to.

I move amendment No. 3:

In page 4, line 2, after “House.” to insert the following:

“For the purposes of this section information shall include all written, verbal, electronic or other communication to and from the Central Bank concerning banks operating in the State, including the IFSC. The information shall include information from the covered institutions, their auditors, legal representations on behalf of such bodies, and information from representative bodies, government departments, public agencies, the European Central Bank, the European Commission and banking institutions in other jurisdictions.”.

One of the features of the work done so far, to which the Minister has referred, by Mr. Nyberg, Mr. Watson, Mr. Regling, Mr. Honohan and others is a lack of written records. They have referred to the fact that there are no minutes for meetings and a lack of records. This amendment is proposed to try to help to get a grip on these gaps in the system, which were very adversely commented upon by the authors I have mentioned. Are there other forms of communication - electronic, written, verbal - to cope with the lack of records concerning banks within the State, including those at the IFSC? There are two banks at the IFSC, Sachsen Landesbank and Depfa, which seem to have had a very shadowy existence and to have contributed much to the difficulties in September 2008. Indeed, the Governor of the Central Bank referred to that fact recently. Did the auditors know what was going on and should they have told people? That is why they are included in my amendment. I have also included legal representatives of various bodies and information held by representative bodies, Departments, public agencies, the ECB, the European Commission and banking institutions in other jurisdictions. There is a lot that we have not found out yet which is why I have tried to put a very wide definition of "information" into this Bill in order that we can get to discuss some of the issues for which there is a serious absence of records. The inquiry needs to determine all of the influences which came to bear on the night of the bank guarantee. We need them to be included in the context of information to be supplied to the committee, which is the purpose of this amendment.

I thank the Senator for his contribution. Section 33AK prohibits the Central Bank from disclosing confidential information if such disclosure is prohibited by its own treaty, the ESCB statute or the supervisory EU legal Acts. Subject to this prohibition, 33AK provides the disclosure of confidential information, via any system or gateways, so any form of information is covered in the Bill as drafted. The term "information" under section 33AK is not limited by reference to specific categories or sources of such information but is limited by the overarching prohibition contained in these EU legal instruments. The amendment identifies a number of categories and potential sources of information. It is entirely a matter for the joint committee to make the decision on the types of information which it requires from the Central Bank. It is then a matter for the Central Bank to comply with the joint committee's request within the legal framework that applies. The Bill has involved close engagement between my Department and the officials working on the banking inquiry. I am satisfied that the wording used in the Bill meets the requirements of the joint committee. Consequently, I am not accepting the amendment. The issues it raises are already covered in the section.

On the issue of the volume of disclosures, referred to by Senator Hayden, I had a cursory look at the requests that came into the Secretary General of the Department of Finance. On first look or first read, it seems to me that we will be providing well in excess of 1 million pages of documents. I understand that there will be an obligation on committee members before they can draw conclusions, at least to read and consider the information on which they based their conclusions. In the context of the very tight timeline and the fact that the Department of Finance alone is supplying more than 1 million pages, I have a lot of sympathy for the members of the committee in terms of them getting through everything.

I am not disposed to accepting the amendment but I thank Senator Barrett for raising this important issue, that all sources of information or gateways would be available to the committee for examination, whether that be electronic or on paper.

Is the amendment being pressed?

No. I thank the Minister for his reply. He has set a very demanding standard and I hope we can live up to it.

Amendment, by leave, withdrawn.
Section 1, as amended, agreed to.

I move amendment No. 4:

In page 4, between lines 2 and 3, to insert the following:

“2. The Central Bank shall inform Dáil Éireann and Seanad Éireann of the total costs arising from an Inquiry conducted under this Act at the end of each month. The notification shall show separately the expenses of members of the Oireachtas, legal expenses, accommodation and office expenses, administration expenses, and all other expenses in excess of €500 monthly. The costs shall be audited monthly by the Comptroller and Auditor General.”.

The spirit of this amendment has already been covered by the Minister when he referred to publishing the running costs under various headings. I wrote this amendment having read that a previous inquiry cost €159 million but which, according to Paul Cullen of The Irish Times, accomplished remarkably little. I agree with the Minister that publishing the running costs may stop them getting out of control. There was a fear that because the Central Bank prints money and members of the legal profession know that, they would have been especially demanding. We are all aware that the running up of enormous costs that happened in the past cannot be tolerated in current circumstances, particularly given the difficulties in our public finances. I will not press the amendment and I thank the Minister for raising the issue of keeping running costs down. If they are published regularly, that will give us an idea of whether they are getting out of control and in what categories. It is the legal category that seems most likely to get out of control.

Amendment, by leave, withdrawn.

Amendments Nos. 5 and 6 have been ruled out of order.

Amendments Nos. 5 and 6 not moved.
Section 2 agreed to.
Title agreed to.
Bill reported with amendment, received for final consideration and passed.

When is it proposed to sit again?

At 2.30 p.m., Tuesday next.

The Seanad adjourned at 5.30 p.m. until 2.30 p.m. on Tuesday, 27 January 2015.