28 Nov 2013, 17:19
Greater oversight of Finance and the Central Bank by the Oireachtas and in particular the Committee of Public Accounts is necessary, according to the PAC’s report on bank stabilisation. The Committee has also called for a review of the code of corporate law in relation to individuals which would allow for fines for those who run failed banks and which would tackle white collar crime.
The Report to the Dáil relates to the examination by the Committee of the various reports of the C&AG which deal with efforts that had to be made by the State to stabilising our domestic banking sector in 2008 and thereafter.
The Report deals with a number of key themes, namely:
• The management of the crisis up to the end of September 2008 when the focus was on liquidity problems including the interaction between the State and the banking sector.
• The introduction of the Guarantee including the options available to the State as outlined in the documentation sent to the Committee by the Department of Finance.
• The efforts to stabilise the banking sector, including the recapitalisation of the banks, the establishment of NAMA and the efforts to resort a working banking system that is lending to small business and dealing with mortgage arrears.
• The evidence showing how oversight, especially by the Regulator and by the Department, was deficient and the steps that have been taken by the Central Bank and the Department to reform so as to ensure that it has the capacity to deal with the management of the economy and the supervision of our financial institution better.
• Finally, the report covers cost of the bank stabilisation,
Among its other key recommendations are:
• A review of the States systems involved in the investigation of white collar crime
• A review of the corporate law as it relates to individuals,
• Greater powers to be given to the Central Bank to put firms into administration
• A change in the Governance code of all State bodies so that former officials remain accountable even when retired
• Fines for those banks who do not meet lending and mortgage resolution targets
Committee Chairman John McGuinness TD said: “Based on the evidence taken by the Committee, it is clear that there was a number of key failings including that the Regulator was not sufficiently aware of the risks that were being taken by bankers whose lending to developers should have forewarned the State of the dangers that were being created by the property bubble.
In addition the Department of Finance did not have the calibre of staff or the culture to better challenge the information it was getting on the banks and on the domestic economy and, while the Report is highly critical of both State bodies, it also acknowledges the changes that were necessary to ensure the State has a regulatory authority and a Department of Finance that is fit for purpose.
The Report is also critical of our banking sector that continues to fail small business through its lending practices and also in its failure to tackle the issue of distressed mortgages.”
The full report can be accessed here: bit.ly/1caBJh7
For further information please contact:
Ciaran Brennan,
Houses of the Oireachtas,
Communications Unit,
Leinster House,
Dublin 2
P: +3531 618 3903
M: 086-0496518
F: +3531 618 4551
Committee of Public Accounts Membership
John McGuinness (Chairman)
Kieran O’Donnell (Vice Chairman)
Paul J Connaughton,
John Deasy,
Robert Dowds,
Áine Collins
Gerald Nash,
Simon Harris,
Mary Lou McDonald,
Sean Fleming,
Eoghan Murphy,
Derek Nolan,
Shane Ross