Dáil Éireann Debate, Thursday - 3 June 2004
94 Mr. O’Connor asked the Minister for Finance his proposals to restore the confidence of the public in the banking system here following recent revelations which have clearly shaken confidence; if his attention has been drawn to the demand for action in the matter; and if he will make a statement on the matter. [16990/04]
View answerThere can be no doubt that the recent revelations in the banking sector have been of a serious nature. It is essential that the correct culture of honesty and integrity permeate at all levels in our banks and financial institutions. The lead in this regard must be taken by senior management.
The role of the Government in such situations is to provide robust legislation that allows any discrepancies to be fully investigated. Through the enactment of the Central Bank and Financial Services Authority of Ireland Act 2003, the Government established the Irish Financial Services Regulatory Authority or IFSRA. IFSRA is now the competent authority in this area and is conducting investigations into these issues, in some cases for many months prior to the revelations becoming public. The legislation allows IFSRA to investigate these matters independently, while liaising with other relevant authorities, such as the Revenue Commissioners.
In addition, further legislation, the Central Bank and Financial Services Authority of Ireland Bill 2003, yesterday completed Report Stage in the Dáil. This Bill complements the Act passed last year and will further enhance IFSRA's powers and strengthen the regulatory environment in which the banks operate.
These two measures, when taken together, deliver the following advances, among others: establishment of a new integrated financial services regulator, IFSRA, bringing together work previously dispersed under four different bodies, with additional resources and a renewed consumer mandate; establishment for the first time of a dedicated statutory officer with a consumer remit across the range of financial services; establishment of a new statutory ombudsman scheme for financial services, for the first time; establishment of a consumer consultation panel, as well as an industry panel, to advise IFSRA; improved communication between regulatory bodies including IFSRA, the Revenue Commissioners, the Director of Corporate Enforcement, and so on; improved transparency and accountability for the regulatory structure; provision for new and substantial penalty powers for IFSRA, with appropriate constitutional protections, and an appeals tribunal; and provision of new powers for IFSRA to require compliance statements from financial institutions.
A properly functioning regulatory regime is the primary means to guarantee public confidence in our banking system and it is clear from what I have said above that the Government has been active in providing a proper statutory framework for that. Until IFSRA's investigations are complete we must be careful not to prejudge the outcome. However, it is clear that the public has the right to expect and receive the highest levels of service and corporate responsibility. The current investigations under way will help to ensure that this is the case in the future. Where there are lessons to be learnt from these investigations, the Government will take them on board, and if it is shown that legislation is required, this will be treated as a priority.
