Dáil Éireann Debate, Wednesday - 6 May 2015
168. Deputy Pearse Doherty asked the Minister for Finance the safeguards in place to prevent loan books at Irish banks that are sold being bought by those who may have, through previous work, knowledge of the loan books or a conflict of interest; and if he will make a statement on the matter. [17753/15]
View answerIt is the responsibility of the Directors of banks operating in Ireland to ensure that they have governance and control arrangements in place that comply with, inter alia, the Central Bank of Ireland's Corporate Governance Code and the European Banking Authority's Governance Guidelines (GL44). These governance and control arrangements are expected to include strong controls in their front-line businesses, in their risk management and compliance functions and finally an effective internal audit capability, such that conflicts of interest in all matters, including the sale of loan books, are managed appropriately and the associated risks are mitigated.
These arrangements should be assessed through, for example, independent external audits, and are also subject to ongoing supervisory engagement by the Central Bank of Ireland, including through regular inspections.
In addition, the Central Bank of Ireland's Fitness and Probity regime requires credit institutions to assess the suitability of members of the management body and requires high standards of behaviour of those individuals on an ongoing basis.
More generally, Directors of any Irish company including banks incorporated under the Companies Act 1963 or the Companies Act 1990, are required to comply with their fiduciary duties to that company, which include:
- acting in good faith and in the interests of the company as a whole;
- avoiding conflicts of interest;
- a prohibition on making undisclosed profits from their position as directors and must account for any profit which they secretly derive from their position as a director; and,
- an obligation to carry out their functions with due care, skill and diligence.
