Banking Sector Regulation

Dáil Éireann Debate, Wednesday - 18 April 2012

Wednesday, 18 April 2012

Questions (255)

Bernard J. Durkan

Question:

252 Deputy Bernard J. Durkan asked the Minister for Finance the degree to which sustainable borrowing and lending here and throughout the EU within the Eurozone and without was monitored by the various central banks throughout the EU; if any particular action was warranted or recommended by the relevant bodies in EU member states in the period 2002 to 2008; the sanctions if any applicable in the absence any corrective action; and if he will make a statement on the matter. [19537/12]

Written answers

Minister for Finance (Deputy Michael Noonan)

The debate around the adequacy of monitoring of private borrowing and lending during the years 2002 and 2008 has been addressed in various reports and studies into the Irish banking crisis. These reports from Professor Patrick Honohan, Messrs Regling and Watson and the Nyberg Commission identified that poor supervision, an overly-deferential attitude by regulators, poor assessment of risks and a lack of follow-through on enforcement, all played a part in the financial crisis and set out the problems that needed to be addressed in the banking regulation area.

While these reports disclosed the shortfalls in both Regulatory and Financial Stability policy, the Central Bank, in its Financial Stability role, did assess the level of borrowing and lending in the system and highlighted its concerns in its regular publications.

I am not in a position to comment on the monitoring role of the Central Banks of other EU countries.