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Personal Insolvency Arrangements

Dáil Éireann Debate, Tuesday - 23 July 2019

Tuesday, 23 July 2019

Questions (255)

Michael McGrath

Question:

255. Deputy Michael McGrath asked the Minister for Finance the fitness and probity implications should a person who works in a bank require a personal insolvency arrangement referring to the seniority of the employee in the bank and the service that employee provides; and if he will make a statement on the matter. [34066/19]

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Written answers

This is a matter for the Central Bank as section 50 of the Central Bank Reform Act 2010 provides that the Central Bank may issue a code setting out standards of fitness and probity. Pursuant to this power, the Central Bank issued the “Fitness and Probity Standards” (current version issued in 2014).  

The Fitness and Probity Standards apply to persons performing controlled functions, including pre-approval controlled functions, in regulated financial service providers. The Fitness and Probity Standards do not apply to persons not performing controlled functions.

Section 5 of the Fitness and Probity Standards (“Financial Soundness”) provides as follows:

“5.1 A person shall manage his or her affairs in a sound and prudent manner.

5.2 Without prejudice to the generality of paragraph 5.1, a person must be able to demonstrate that his or her role in a relevant function is not adversely affected to a material degree by the fact that one or more of the following may be applicable:

(a) the person has defaulted upon any payment due arising from a compromise or scheme of arrangement with his or her creditors or made an assignment for the benefit of his or her creditors;

(b) the person is subject to a judgment debt which is unsatisfied, either in whole or in part, whether in the State or elsewhere;

(c) the person is or has been the subject of a bankruptcy petition, whether in the State or elsewhere;

(d) the person has been adjudicated a bankrupt and the bankruptcy is undischarged, whether in the State or elsewhere; or

(e) a person was a director of an entity which has been the subject of insolvency.”

Regulated financial service providers must not allow a person to perform a controlled function unless they are satisfied that the person complies with the Fitness and Probity Standards. In this regard, Section 13.3 of the Central Bank’s “Guidance on the Fitness and Probity Standards” provides that “the Central Bank expects regulated financial service providers to consider the responsibilities of the specific function and to determine the specific competencies, and level of probity that should be expected of a person performing that specific controlled function in the regulated financial service provider.” Sections 13 to 18 of the Guidance provide further information.

Separately, the Central Bank may assess the fitness and probity of a person performing a controlled function role and may take regulatory action where the person is not of such fitness and probity as is appropriate to perform the controlled function, or otherwise does not comply with the Fitness and Probity Standards. All such assessments are carried out on a case-by-case basis by reference to the specific controlled function role being performed.

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