The Central Bank Section 6A Report on the culture and behaviour of the main retail banks was drafted by the Central Bank in response to my request in November 2017, on foot of the serious cultural failings in banks brought to light in the Tracker Mortgage Examination.
My Department’s analysis of the report found that it is a detailed, qualitative and considered analysis of culture within the banking sector. The report’s recommendations will drive positive changes in terms of wider banking culture, greater delegation of responsibilities, and enhanced accountability. The report importantly focuses on simplifying the taking of sanctions against individuals who fail in their financial sector roles.
As the Deputy will be aware, I have long been on the record as stating that there are cultural failings in the banking sector that must be addressed. I and my colleagues in Government are supportive of measures to change behaviour, operations and organisational culture within the financial sector that will keep the customer at the heart of its operations.
The Central Bank's proposals to enhance individual accountability by way of Conduct Standards for all regulated financial services providers and the individuals working within them; a Senior Executive Accountability Regime (similar to the Senior Managers Regime in the UK); and, enhancements to the current Fitness and Probity Regime are being considered as part of the work of the forthcoming Central Bank (Amendment) Bill. Officials in my Department are engaging with the Central Bank and other stakeholders in order to identify the legislative changes that are required to implement such a customer centric culture and to enhance individual accountability. I intend to bring forward heads of a Bill for approval in Q1 2019.
As part of my regular ongoing engagement with industry I meet with representatives of the main banks, and updates on the Tracker Mortgage Examination form part of the discussion at these meetings. The Central Bank has confirmed that four of the five main lenders are now close to completing their redress and compensation phases. Central Bank enforcement investigations in respect of six of the lenders are continuing, and will consider all possible angles, including potential individual culpability.