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Commissions of Inquiry.

Dáil Éireann Debate, Wednesday - 3 February 2010

Wednesday, 3 February 2010

Questions (44, 45, 46)

Richard Bruton

Question:

107 Deputy Richard Bruton asked the Minister for Finance if the proposed banking inquiry will have any constraints on its investigations and the publication of findings; and if he will make a statement on the matter. [5188/10]

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Thomas P. Broughan

Question:

146 Deputy Thomas P. Broughan asked the Minister for Finance the terms of reference of the initial bank inquiry reports, those to be prepared both by the Central Bank Governor and by the hired external report; and if he will make a statement on the matter. [5308/10]

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Caoimhghín Ó Caoláin

Question:

157 Deputy Caoimhghín Ó Caoláin asked the Minister for Finance the amount of input he will allow from Members and committees of the Houses of the Oireachtas into the establishment of the terms of reference for the commission of inquiry into the banking crisis; if he will allow a formal procedure of submission from the aforementioned following their review and debate of the two reports commissioned to be delivered by May 2010. [5099/10]

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Written answers

I propose to answer Questions 107, 146 and 157 together.

The Government has decided to establish a framework for a comprehensive investigation into the causes of the systemic failures in the Irish banking sector which culminated in the need for the State intervention in the sector. The framework for investigation will have two stages. The first stage of the investigation will consist of the preparation of two separate preliminary reports from the Governor of the Central Bank and from Mr Klaus Regling, a recognised international expert. The second stage of the investigation will be the establishment of a statutory commission of investigation, which will be chaired by a recognised expert or experts of high standing and reputation. The terms of reference for this commission will be informed by the conclusions of the two preliminary reports.

As part of the preparatory stage, the Government has requested that the Governor of the Central Bank report to me on the performance of the respective functions of the Central Bank and Financial Regulator in the period since the establishment of the Financial Regulator up to September 2008 having regard to the statutory powers, roles and responsibilities of the Central Bank and Financial Regulator.

The Government has also agreed that a second report, to be commissioned from Mr Klaus Regling, a recognised international expert, should consist of an investigation into the background to and causes of the recent crisis in Ireland's banking system up to September 2008; and an assessment of the lessons that can be learned to inform the future management and regulation of the sector, both in relation to individual institutions and in relation to the management of risks and stability issues within the regulatory and Governmental systems.

The Government has agreed that these reports will consider also the international, social and macro-economic environment which provided the context for the recent crisis in the banking sector and that they should have regard as appropriate to existing reports on the banking system, such as the de Larosière and Turner Reports.

I have already announced that Mr Klaus Regling has agreed to the appointment as the independent ‘wise person' to conduct a preliminary investigation into the crisis in our banking system. Mr Regling is a highly-experienced individual with long experience in private and public sector positions, including a period as Director General for Economic and Financial Affairs of the European Commission and Director General in the German Ministry of Finance. Mr Regling was also a member of the Issing Commission, appointed by Chancellor Merkel in 2008 to advise the German Government on the reform of financial regulation.

The formal stage of the inquiry, which is to be established following the completion of the preliminary investigations by Mr Regling and the Governor of the Central Bank, will be established pursuant to the Commissions of Investigation Act 2004. I intend that the inquiry will operate pursuant to the powers set out in the Commissions of Investigation Act 2004.

In relation to the input into the establishment of the terms of reference for the statutory Commission of Investigation by Members and Committees of the Houses of the Oireachtas, I set out in the Dáil on 19 January 2010 the proposed involvement of the Oireachtas in each stage of the process as follows:

an appropriate Oireachtas Committee will meet both the Governor and the independent expert at the outset of their work to be briefed on the Members' priorities for investigation;

the two preliminary reports, when completed, will be laid before the Houses of the Oireachtas and the Oireachtas Committee will be invited to consider the findings of the reports;

the terms of reference and draft Government Order to establish the statutory Commission of Investigation will be laid before the Oireachtas; and

the report of the Commission of Investigation will, when completed, be laid before the Oireachtas for further consideration by the Committee. It will then be open to the Committee to hold public hearings on the Report.

On that occasion, I also underlined that it is essential that an Oireachtas Committee examines the reports from the preliminary investigations as it will have a vital function in assisting in the formulation of appropriate terms of reference with regard to the statutory stage of the inquiry.

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