Tuesday, 2 July 2013

Questions (277)

Mattie McGrath


277. Deputy Mattie McGrath asked the Minister for Finance the way AIB and Permanent TSB can advertise for business and investment when it is accepted that they are insolvent institutions with no capacity to offer secure liquidity; the exact extent of the insolvency-liquidity crisis in the above named institutions; his views on the way this will impact on the interest of those taxpayers who might respond to advertised business offers from insolvent institutions; and if he will make a statement on the matter. [32187/13]

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Written answers (Question to Finance)

As the Deputy will be aware Allied Irish Bank and Permanent TSB each hold Irish banking licences issued by the Central Bank of Ireland and are subject to regulations which require inter-alia each institution to be solvent. Further details of the financial position of each institution are available in the respective annual reports which are available on their websites. AIB and Permanent TSB are licensed banks and accordingly are legally entitled to engage in regulated activities, which includes, inter alia, accepting deposits from the public.

I have been informed by the Central Bank of Ireland (“Central Bank”) that the Consumer Protection Code applies to the regulated activities of regulated entities operating in the State and sets out General Principles with which a regulated entity must comply. For example, a regulated entity must act honestly and professionally, with due skill, care and diligence in the best interest of consumers. Chapter 9 of the Consumer Protection Code places specific requirements on regulated firms in relation to the contents and presentation of advertisements.

The main areas covered by Chapter 9 of the Consumer Protection Code require regulated firms to ensure advertisements are fair and not misleading, clearly understood, complete and accurate.

The Central Bank deals with regulated entities where concerns around the fairness, clarity, accuracy and potential for an advertisement to be construed as misleading in their overall content and presentation, and actively follows up on any issues identified. For example, where key information in relation to a product or service in advertisements is not sufficiently prominent and is included in smaller print to other parts of the advertisement, the Central Bank will address this with the individual entity.