In accordance with recent modifications to Standing Orders all Members can speak twice. A Member may make a second contribution, which shall not exceed two minutes. The Member who moves the amendment retains the right of reply. Effectively, the mover can speak three times, a contribution when moving the amendment, a second contribution lasting two minutes, and a third one to conclude the debate.
Central Bank Bill, 1997: Report and Final Stages.
I move amendment No. 1:
In page 5, line 16, after "thereunder" to insert "contributing to the prudential supervision of credit institutions and to the stability of the financial institutions".
With the agreement of the House, I would be prepared to take amendments Nos. 1 and 2 together because No. 2 is consequential on No. 1.
Is that agreed?
Agreed.
We discussed this matter at length on Committee Stage and I do not want to repeat what was said then. I want to highlight one or two points I omitted to make on Committee Stage. This is an attempt to amend section 5 which sets out various functions of the Central Bank and, in particular, the additional functions being imposed on it by our membership of the euro zone and of the European Central Bank. Amendments Nos. 1 and 2 are taken substantially from article 105(5) of the third protocol of the Maastricht Treaty which states that the ESCB shall contribute to the smooth conduct of policies pursued by the competent authorities relating to the prudential supervision of credit institutions and the stability of the financial system. In essence, I want to know why that reference was taken out of the Bill. I know the contents of the Bill have been negotiated with the European Monetary Institute and to a large extent reflect the third protocol of the Maastricht Treaty.
Amendment No. 2 allows the Minister to be informed on issues which concern the regulation of the financial supervision function of the Central Bank. We discussed this matter in a somewhat different context on Committee Stage, in terms of the Minister being consulted. He is entitled to be consulted under the Bill and under previous Central Bank Acts in relation to non-ECB related matters. As article 105, to which I referred, is an ECB and an ESCB related matter I propose that the Minister should be informed rather than consulted. This is slightly different from the discussion on Committee Stage.
The Deputy will recall that on Committee Stage I pointed out a drafting error in his amendment in that rather than amend subsection (5) with his amendment No. 2, I assume he proposes to amend subsection (4).
No, I do not.
At that time the Deputy appeared to accept this point and on the assumption that the same error has been inadvertently repeated I do not intend to revisit the matter. If this is not the case, I am happy to repeat what I said on Committee Stage.
I was happy to have the debate on Committee Stage on the basis of subsection (4). I am now proposing it, as I had originally intended, on the basis of subsection (2) which refers to information. Information is constrained simply to ESCB related matters. The wording is contained in Article 105(5) of the Maastricht Treaty and it is, therefore, an ESCB related matter.
Subsection (5) provides for the Minister for Finance's right to be informed about the banks monitoring policy role within the European system of central banks and the European Central Bank. Subsection (4), however, provides for the Minister's right to be consulted in relation to all of the bank's other functional duties, including the licensing and supervision of financial institutions as provided for under law. I am assuming the Deputy would prefer if the Minister could be consulted rather than merely informed——
I have given up on that.
——on the execution and performance of these functions and duties which are conferred on the bank under Acts of the Oireachtas. On the substance of the Deputy's amendments, I pointed out on Committee Stage that a proposed new subsection (2) relates to the objectives of the bank other than the primary objective of price stability as set out in the proposed new subsection (1). These other objectives include contributing to the stability of the financial system, promoting the efficient and effective operation of payment and settlement systems and discharging any other duties conferred on it by law. The bank has statutory duties in relation to the licensing and supervision of certain financial institutions and payments systems. The wording of the proposed subsection (2) is sufficient to cover the objectives underlying these duties and, therefore, adequate to cover the intent behind Deputy McDowell's amendment No. 1.
I am convinced that the wording in the proposed new subsection (4) is adequate to cover the intent behind Deputy McDowell's amendment No. 2. However, the Minister would have the right to be consulted on the performance by the bank of all its non ESCB related statutory functions, including those related to licensing and supervision. As became apparent during the discussions on Committee Stage, the Deputy's intention is that the Minister for Finance should be consulted regularly by the Central Bank in connection with what the bank has found out about individual cases. I am not prepared to go down that road. Such a measure would require a significant and fundamental change in Central Bank practice and is something to which the Legislature will have to give long and hard thought.
Under the wording of section 5, the Minister will be able to be consulted on all of the bank's non-ESCB activities. This will include consultations on the general supervisory functions of the bank, for example, in relation to whether it has sufficient powers in legislation to carry out its duties but will not include consultation on the affairs of a supervised entity unless that entity has consented to the disclosure of information by the bank. This is in line with the bank's confidentiality regime as set out in section 16 of the Central Bank Act, l989. In the circumstances I am not prepared to accept the Deputy's amendments.
We have a difficulty in that the Minister anticipated we would have a similar, if not exactly the same, debate as on Committee Stage. On that occasion he suggested, and repeated today, that I might have intended to do something slightly different from what was in the amendment. I accepted that and was happy to have a debate on that basis on Committee Stage. I have now reverted to the somewhat more modest content of the amendment as proposed on Committee Stage which would entitle the Minister merely to be informed. The reason for this is that the "prudential supervision of credit institutions and the stability of the financial system" is the phrase used in the protocol to the Treaty. For some reason, which I do not understand, the phrase "supervision of credit institutions" does not appear in the Bill. Why have those words been excised, I presume deliberately, in negotiations with the EMI? I accept that prudential supervision of the credit institutions is an issue in which the European systems of central banks and the European Central Bank have a role and, therefore, that the Minister could not properly be consulted without us being in breach of our duties under the third protocol. It could still be possible for the Minister to be informed on these matters, as he is entitled to be informed on all other ECB and ESCB matters.
The European Central Bank has no role in the supervision of entities, unless it was given a role by the Council.
Is the Deputy pressing amendment No. 1?
I intend to press it but not to call a vote. The European system of central banks has a specific role under the Treaty because Article 105(5) states:
The ESCB shall contribute to the smooth conduct of policies pursued by the competent authorities relating to the prudential supervision of credit institutions and the stability of the financial system.
Why has that section about the prudential supervision of credit institutions been taken out of the Bill? The Minister is right in saying the primary reason I want this is that it is important the Minister should be entitled to have some information and that there should be some supervision of the way in which the Central Bank discharges these important functions, particularly when the currency effectively ceases to exist at the end of the year and many of the functions of the Central Bank will become redundant. The regulatory role will then become all the more important. We have seen plenty examples in recent weeks of where the regulatory and supervisory role of the Central Bank is extremely important and it is being broadened all the time.
I expressed some doubts and concerns on Committee Stage on whether the Central Bank is equipped to discharge the full regulatory role we are giving it and which we are broadening to include investment intermediaries. When responding perhaps the Minister would address the issue of whether he is satisfied the bank has the resources — the personnel, expertise and wherewithal, not merely the legal power — to discharge all the various functions being given to the bank.
I have had no indication from the Governor or the Board of the Central Bank that they are short of resources in any of these areas. If either the Governor or the board were to make demands for resources they would be considered. The Central Bank of Ireland will continue to have a supervisory role in all the various financial institutions. Nothing will change in that regard. The European Central Bank does not have a specific role in those matters unless it were to be given such a role by the Council.
Amendment put and declared lost.
Amendment No. 2 not moved.
I move amendment No. 3:
In page 5, line 42, after "Treaty" to insert "and without prejudice to the generality of the foregoing the Bank shall have regard to the desirability of attaining a high level of employment and in particular the Bank shall have regard to the provisions of Title VIa of the Treaty establishing the European Community as inserted by Article 2.19 of the Treaty done at Amsterdam on 2nd day of October, l997".
The amendment specifically seeks to broaden the economic remit of the Central Bank beyond the understandable priority that is given to price stability. The Minister rightly pointed out that the amendment refers to the Treaty done at Amsterdam which has not yet been ratified. I have no difficulty in excising the reference to the Treaty done at Amsterdam, if that is what the Minister wants. However, we should put employment at the centre of economic policy of the Union. I said on Second Stage that employment is probably the one single element of economic policy which touches on virtually all citizens of the European Union, particularly as there are four million people unemployed in Germany and there is civil unrest in France related to unemployment. It is important that the institutions of the Union including ECOFIN and the Central Bank should be seen to be responsive to this problem. We are in a difficulty if we create in the Central Bank an enormously powerful institution, more powerful than any single national Government, in terms of maintaining and driving forward the economic policy of the Union and of individual states.
If we create an institution which is not accountable to anybody, we will be in difficulty. If its economic remit is to be limited to monetary policy, money flow, interest rates and the external exchange rate, we will be in particular difficulty. The amendment focuses on the importance given to employment in the appropriate chapter of the Amsterdam Treaty and regards it as an important economic aim of the Central Bank and the European Union as a whole.
The subsection which the Deputy proposes to amend was amended by me on Committee Stage. The new wording is the result of a recent direct approach to me by Commissioner de Silguy, the commissioner in charge of the directorate responsible for producing the Commission's report on the compatibility of national central bank legislation with the Treaty. The wording of the amendment has been the subject of consultation with the European Commission and the European Monetary Institute.
Commission de Silguy's concerns relate to the wording of the subsection in the Bill, as published, in that it provided that "the Bank shall act in the interests of the welfare of the people as a whole". This text was originally in section 6 of the Central Bank Act, 1942, which provides that a general function of the bank shall be to take whatever steps are necessary to safeguard the currency. This duty, however, is qualified by the provision that "the constant and predominant aim shall be the welfare of the people as a whole". The purpose of section 5 of the Bill is to replace section 6 of the 1942 Act to take account of the fact that monetary policy will be the preserve of the European Central Bank post-EMU.
Article 105 of the Treaty on European Union provides that the European system of central banks, of which the Central Bank of Ireland will be part, "shall support the general economic policies in the Community with a view to contributing to the achievement of the objectives of the Community as laid down in Article 2". Article 2 of the Treaty provides that:
The Community has the task of promoting a harmonious and balanced development of economic growth, sustainable and non-inflationary growth respecting the environment, a high degree of convergence of economic performance, a high level of employment and of social protection, the raising of the standard of living and quality of life, and economic and social cohesion and solidarity among Member States.
As I explained on Committee Stage, the Government believes that the sentiments in Article 2 of the Treaty are fully consistent with the Central Bank's role whereby, in relation to monetary policy, it must have regard to the welfare of the people and, therefore, it acceded to the commissioner's request that section 5(6) of the Bill be replaced with the wording of Article 105 of the Treaty. This was achieved by my amendment on Committee Stage.
As for the inclusion of a general reference to the Central Bank having regard to the desirability of attaining a high level of employment, Article 2 of the Treaty sets out the European Union's objectives to which the Central Bank, as a member of the ESCB, shall have a role in contributing. The Article states that "the Community has the task of promoting . a high level of employment and of social protection".
The wording of the subsection, as amended by me on Committee Stage, is adequate and consistent with the transfer of monetary policy to the European Central Bank post EMU. It is the result of extensive examination and discussion with the European Monetary Institute and the European Commission.
I am in some difficulty. Before the Minister amended subsection (6) it included the phrase "the interests of the welfare of the people as a whole". As far as I am aware, this was borrowed from the social protocol to Bunreacht na hÉireann in 1942. To say the least, it is perverse to include a provision in the Bill, as published, and then delete it on Committee Stage, particularly given its anodyne nature. I am at a loss to understand the advice of the European Monetary Institute that such a phrase could conceivably be inimical to our duties under the Maastricht Treaty. It is bizarre that should be the case.
This is the subsection about which Commissioner de Silguy approached me directly. Prior to publication, the Bill was discussed in considerable detail with the European Monetary Institute and the European Commission. Following publication, the European Commission looked at it again and prior to the ECOFIN Council last month Commissioner de Silguy approached me with a view to having section 5 changed.
Why?
Commissioner de Silguy will report to the ECOFIN Council on the compatibility of national central bank legislation with the Treaty. He was of the view that this change was necessary. Consequently, I amended subsection (6) on Committee Stage. That is what the European Commission wanted.
Will the Minister consider the signal that is being sent about the way in which the Central Bank is to discharge its role if the commissioner considers that an anodyne provision which would require the bank to act in the interests of the welfare of the people as a whole is repugnant? I find this strange. It confirms people's worst fears about the Central Bank. While it will have to have regard to monetary policy, money flow, interest rates and the external exchange rate, it may disregard everything else. That is the message that is being sent.
The Deputy is being slightly unfair to the European Commission. The wording of subsection (6) is wide and accommodates the Deputy's concerns.
Amendment put and declared lost.
Amendment No. 4 not moved.
We now come to amendment No. 5. Amendment No. 6 is an alternative. If amendment No. 5 is agreed, amendment No. 6 cannot be moved.
I move amendment No. 5:
In page 9, lines 11 to 14, to delete "(inserted by the Treaty on European Union done at Maastricht on the 7th day of February, 1992) of the Treaty establishing the European Community done at Rome on the 25th day of March, 1957," and substitute "of the Treaty".
On Committee Stage Deputy McDowell proposed a drafting amendment to simplify the reference to the Treaty in section 16 of the Bill. As agreed, I have considered this point in consultation with the parliamentary draftsman. The Deputy's point is taken and the parliamentary draftsman advises that the reference to the Treaty can be simplified further. Section 12 inserts a complete definition of "the Treaty" into the Central Bank Act, 1989. Accordingly, this amendment reduces the reference to the Treaty to its simplest form in the interests of clarity. This meets the Deputy's concern.
I am happy to accept the amendment.
Amendment agreed to.
Amendment No. 6 not moved.
I move amendment No. 7:
In page 11, after line 30, to insert the following:
"21. — Section 16(2)(a) of the Act of 1989 is hereby amended by the insertion, after ‘proceedings', of the following:
‘or by a tribunal to which the Tribunals of Inquiry (Evidence) Acts, 1921 to 1997, have been applied pursuant to a resolution passed by both Houses of the Oireachtas'.".4
This issue was the subject of a lengthy debate on Committee Stage. I will summarise the argument I made. While the Central Bank is allowed in certain circumstances to disclose information, specifically to a court of law in criminal proceedings, it is not allowed to disclose information to a tribunal established by the Houses of the Oireachtas. The effect of the amendment would be to allow the Central Bank to co-operate with and disclose information to a tribunal established by the Houses of the Oireachtas. I am not proposing this in a vacuum. There are currently two tribunals operating under authority given to them by the Oireachtas. I do not know, and it would be wrong to speculate, whether they want any information from the Central Bank or if it has information that could be of use to them. Given the subject matter of those tribunals, it is by no means inconceivable that there could be such information. It is important for the purposes of those tribunals and for future purposes that the bank should be given power and should have a duty to co-operate with tribunals set up by the Oireachtas in these types of circumstances.
I invited the Minister, on Committee Stage, to reconsider Article 12, paragraph 7 of the 1989 banking directive which allows the central banks of member states to disclose information in certain circumstances. It includes two inspectors acting on behalf of those departments. The Minister suggested on Committee Stage that he would examine the intended application of paragraph 7. There was some suggestion that it might refer only to insurance cases, but that is not my reading of the directive and I would be interested to hear if the Minister has anything further to add in that regard.
The Central Bank is subject to strict confidentiality requirements. These are set out in section 16 of the 1989 Central Bank Act and subsequent amendments. Section 16 introduced provisions related to the disclosure of information by the bank's staff, similar to those already existing for public servants in relation to the prevention of corruption.
Basically, the section provides that the governor, a director, officer or servant of the bank may not disclose information related to the business of any person or body, whether corporate or incorporate, which came to his knowledge by virtue of his office of employment, or the bank's activities in respect of the protection of the integrity of the currency or the control of credit unless such disclosure is to enable the bank to carry out its functions under the Central Bank Acts. As the bank did not conduct exchange control activities under these Acts, this confidentiality regime does not apply to these activities.
Provision is made for the disclosure of information as required by a court in connection with criminal proceedings. In addition, the bank, under section 49(2) of the Investment Intermediaries Act, 1995, may disclose to the gardaí, where it has reasonable cause to believe that a criminal offence has been committed, any information to enable further investigation of the alleged offence. Further, under the provisions of the Criminal Justice Act, 1994, the bank is obliged to report to the gardaí a suspicion that any entity it supervises has committed or is committing the offence of money laundering or certain related offences. Such offences would include tax evasion in relation to the proceeds of criminal activity.
Penalties for contravention of the provisions of section 16 are: on summary conviction, a fine not exceeding £1,000 and/or a term of imprisonment not exceeding 12 months, or on conviction on indictment, a fine not exceeding £25,000 and/or a term of imprisonment not exceeding five years. These secrecy provisions are vital in the maintenance of the financial sector's confidence in the bank and, in turn, the public's confidence in the operation of the financial sector.
Irish law on confidentiality in financial supervision implements European Union law which requires a high degree of professional secrecy. Article 12 of the First Council Directive on the co-ordination of laws, regulations and administrative provisions relating to the taking up and pursuit of the business of credit institutions requires the State to ensure that the Central Bank maintains very strict confidentiality. The Office of the Attorney General has been consulted on this issue and has advised that the directive, while allowing certain exceptions, does not permit the proceedings of a tribunal to come within the exceptions prescribed. Although European law does, as an exception, permit the giving of information by the Central Bank of Ireland in connection with legal proceedings, rules of law emanating from the directive and Ireland's obligations under the Treaty would prevent adoption of a provision which would widen the existing categories of exceptions vis-à-vis the Central Bank of Ireland. Therefore, any legislation purporting to extend the present categories of exceptions to the bank's confidentiality regime would, prima facie, be ultra vires the directive and the EU Treaty. Confidentiality is a core element of effective financial regulation and, as such, is deeply embedded in the body not only of EU law but of international law generally.
On Committee Stage the Deputy referred to Article 16.7 of the Second Banking Directive as a possible provision which would allow me to amend section 16 of the 1989 Act to allow disclosure by the bank of information to a tribunal of inquiry. Article 16.7 provides that:
.a Member State may, by virtue of provisions laid down by law, authorise the disclosure of certain information to other departments of their central government administrations responsible for legislation on the supervision of credit institutions, financial institutions, investment services and insurance companies and to inspectors acting on behalf of those departments. However, such disclosures may be made only where necessary for reasons of prudential control.
Therefore, Article 16.7 does not allow the disclosure of information to an entity other than one which is a central Government Department which has responsibility for legislation on the supervision of financial institutions. Also, such disclosure is restricted on the grounds that it can be for prudential supervision purposes only. An example in an Irish context would be the disclosure of information by the Department of Enterprise, Trade and Employment, which has responsibility for supervising the insurance industry, to the Central Bank, which has responsibility for supervising banking groups which contain insurance companies. In the circumstances I am not in a position to accept the Deputy's amendment.
I am not entirely persuaded by the last part of the Minister's response. It is Article 12.7 rather than Article l6.7 and we are speaking about section 16. The exact wording given by the Minister is correct and it allows for disclosure to departments of their central Government administrations responsible for legislation on the supervision of credit institutions. In relation to issues concerning only prudential control, will the Minister confirm if that includes the Department of Finance which would typically draft the legislation that governs this area? To use a hypothesis not too far removed from what we have experienced, if the Central Bank were concerned that a relatively small number of depositors held an excessive amount of deposits, say a third or quarter of the amount on deposit in a bank, there would be a potential risk for that bank in terms of prudential control if all those relatively small number of depositors suddenly withdrew their money. Is the Central Bank, in exercising its supervisory role, at liberty to inform the Department of the central government, perhaps the Department of Finance and presumably the Minister for Finance, in regard to its concerns? Can it disclose information in relation to that?
We are talking in terms of the banking directive. Irrespective of whether that is permitted under the banking directive, it seems to be prohibited by section 16 of the 1989 Act. I am sure the Minister would acknowledge the Opposition will have considerable difficulty attempting to amend this Bill because all of its provisions appear to have been agreed with the EMI and are seriously circumscribed by the protocol to the Treaty and by the banking directives. I accept that, but that means we must study the banking directives and ascertain if it is possible to be a little more flexible with our legislation to incorporate what appear to be acceptable wordings from the directives. That is why I picked that paragraph of the article of the directive. Paragraph 7 of Article 16 appears to allow a somewhat more liberal regime of disclosure than appears to have been permissible under our Central Bank Acts. If we can go no further than that without the agreement of the EMI, surely we can go that far?
The Deputy raised a number of specific questions. The answer is "no" to the Deputy's question about whether the Central Bank could notify the Minister for Finance or the Department of Finance of any of the matters he raised. It would be the job of the Central Bank to sort out those matters. There is no provision for it to approach the Department of Finance to advise it of those matters. The Central Bank would approach the Minister for Finance only to request additional powers in a legislative context.
The Minister does not appear to have approached this matter with the free spirit one might have hoped. I am looking to push out the boundaries of disclosure as far as possible without going outside the scope of what will be permissible under the new regime into which we are getting and I am sorry the Minister is unable to do this. This gives rise, probably unjustly, to unnecessary suspicion that the Central Bank is being prevented and discouraged from giving information and from co-operating with tribunals set up by the Oireachtas. If a tribunal is set up by the Houses of the Oireachtas to investigate a matter, it is incumbent on us to ensure it has the maximum possible power to do so. In the context of this Bill, we should seek to oblige the Central Bank to disclose information and to co-operate with tribunals set up in that way.
Amendment put.
The Dáil divided: Tá, 49; Níl, 71
Tá
- Allen, Bernard.
- Bruton, John.
- Barnes, Monica.
- Burke, Liam.
- Barrett, Seán.
- Burke, Ulick.
- Belton, Louis.
- Carey, Donal.
- Boylan, Andrew.
- Cosgrave, Michael.
- Browne, John (Carlow-Kilkenny).
- Coveney, Hugh.
- Crawford, Seymour.
- McGinley, Dinny.
- Creed, Michael.
- McGrath, Paul.
- Currie, Austin.
- McManus, Liz.
- D'Arcy, Michael.
- Mitchell, Gay.
- Deasy, Austin.
- Mitchell, Jim.
- Durkan, Bernard.
- Mitchell, Olivia.
- Enright, Thomas.
- Naughten, Denis.
- Farrelly, John.
- O'Keeffe, Jim.
- Fitzgerald, Frances.
- O'Shea, Brian.
- Gilmore, Éamon.
- Perry, John.
- Gormley, John.
- Quinn, Ruairí.
- Hayes, Brian.
- Reynolds, Gerard.
- Higgins, Joe.
- Shatter, Alan.
- Hogan, Philip.
- Sheehan, Patrick.
- Kenny, Enda.
- Stagg, Emmet.
- McCormack, Pádraic.
- Stanton, David.
- McDowell, Derek.
- Timmins, Billy.
- McGahon, Brendan.
- Upton, Pat.
- Wall, Jack.
Níl
- Ahern, Bertie.
- Keaveney, Cecilia.
- Ahern, Dermot.
- Kelleher, Billy.
- Ahern, Michael.
- Kenneally, Brendan.
- Andrews, David.
- Killeen, Tony.
- Ardagh, Seán.
- Kirk, Séamus.
- Aylward, Liam.
- Kitt, Michael.
- Brady, Johnny.
- Kitt, Tom.
- Brady, Martin.
- Lawlor, Liam.
- Brennan, Séamus.
- Lenihan, Brian.
- Briscoe, Ben.
- Lenihan, Conor.
- Browne, John (Wexford).
- McCreevy, Charlie.
- Byrne, Hugh.
- McDaid, James.
- Callely, Ivor.
- McGennis, Marian.
- Carey, Pat.
- McGuinness, John.
- Collins, Michael.
- Moffatt, Thomas.
- Cooper-Flynn, Beverley.
- Molloy, Robert.
- Coughlan, Mary.
- Moynihan, Donal.
- Cowen, Brian.
- Moynihan, Michael.
- Cullen, Martin.
- Ó Cuív, Éamon.
- Daly, Brendan.
- O'Donoghue, John.
- Davern, Noel.
- O'Flynn, Noel.
- de Valera, Siíle.
- O'Hanlon, Rory.
- Dempsey, Noel.
- O'Keeffe, Batt.
- Dennehy, John.
- O'Keeffe, Ned.
- Doherty, Seán.
- O'Kennedy, Michael.
- Ellis, John.
- Power, Seán.
- Fahey, Frank.
- Roche, Dick.
- Fleming, Seán.
- Ryan, Eoin.
- Flood, Chris.
- Smith, Brendan.
- Foley, Denis.
- Smith, Michael.
- Fox, Mildred.
- Treacy, Noel.
- Hanafin, Mary.
- Wallace, Dan.
- Harney, Mary.
- Wallace, Mary.
- Haughey, Seán.
- Walsh, Joe.
- Jacob, Joe.
- Woods, Michael.
- Wright, G.V.
Tellers: Tá, Deputies Stagg and McDowell; Níl, Deputies S. Brennan and Power.
Amendment declared lost.
I move amendment No. 8:
In page 11, after line 30, to insert the following:
21. -(1) The Freedom of Information Act, 1997, shall apply to the Bank as if it stood prescribed pursuant to regulations made by the Minister for Finance for the purposes of paragraph 1(5) of the First Schedule to that Act.
(2) This section shall come into operation on the day that is one year from the date of passing of this Act.".4
The amendment seeks to extend to the Central Bank the Freedom of Information Act passed by the House in 1997. I accepted on Committee Stage that many of the day to day workings of the Central Bank are covered by the prohibition on disclosure and that many of its legal and statutory obligations may not be disclosed by reason of section 16, about which we had a lengthy discussion. This amendment, if accepted, would have a relatively restricted application and would most likely apply to the day to day decision making and administrative procedures within the bank.
The First Schedule of the Freedom of Information Act lists the Government Departments and semi-State bodies to which the Act immediately applies. It goes on to specify that the Act shall come into effect for local authorities and health boards 18 months after it has been passed, which should be October this year. The Schedule also allows Ministers with specific responsibility for certain institutions to extend by way of regulation the application of the Act to those institutions. A significant number of institutions would be covered and the Central Bank is one over which the Minister for Finance would have power in the sense that he would be the Minister responsible for making the regulations. I seek by way of this amendment to have the Minister make the regulations to extend the provisions of the Freedom of Information Act to the Central Bank.
From 21 April next, the Freedom of Information Act, 1997 will apply to the public bodies listed in the First Schedule of the Act. These bodies comprise Government Departments and, for the most part, public bodies which are wholly or primarily staffed by civil servants and whose functions are closely aligned with those of their parent Government Department. Paragraph 1(5) of the First Schedule of the Freedom of Information Act provides that any body established by or under any enactment shall be brought under the scope of the Act pursuant to regulations made by the Minister for Finance with the consent of the appropriate Minister. It was always intended to use this mechanism to widen application of the Act in an incremental fashion across the wider public service. However, I have no plans at present to apply this provision to the bank. The Deputy is aware and accepts that in such circumstances the existing confidentiality regime of the Central Bank would still apply under the terms of sections 26 and 32 of the Freedom of Information Act. As I said on Committee Stage, I have no objection in principle to the Central Bank coming under the remit of the Freedom of Information Act. I would see this happening over a period of time in accordance with the incremental approach being adopted. I will bear the Deputy's views in mind in that context.
The Minister has repeated the response he gave on Committee Stage. I thought that his response was informed by his belief that I was looking to use this issue as a Trojan horse to get at information about other matters. I protest my innocence. I am trying to persuade the Minister that my intentions were benign and were looking to the longer term. There is a danger that we will put the Act on the Statute Book and forget about it. It is important that it is extended as quickly and effectively as possible to all public bodies. The Minister says that he has no objection in principle to extending the Act, so why is he not doing so? Why can he not tell the House that he will do so at some future stage? Are there any circumstances which suggest he should delay? Why can we not move ahead as soon as possible?
We all accept that, like the Civil Service, public bodies will need time to adapt procedures so that they will be able to provide information required by the public, lobby groups or politicians. The regulations would allow the Central Bank such time. We are discussing the Central Bank but will the Minister give a general indication of other institutions which come under his remit and which would look to him to make regulations of this kind?
I have stated that I have no objection in principle to extending the Freedom of Information Act to the Central Bank. It will happen in time. The provisions of that Act come into play on 21 April. The Government and its predecessor took the approach that the Act would be extended to other bodies over a period of time. Let us see how it will operate from 21 April. The Deputy will admit that this amendment is not necessary in the Central Bank Bill. The incremental approach to bringing bodies under the remit of the Freedom of Information Act will take some time. Hopefully it will be a relatively short period.
Notice taken that 20 Members were not present; House counted and 20 Members being present,
I am disappointed that the Minister has not found it possible to accept this uncontroversial amendment. We do not often get the opportunity to debate issues such as the workings of the Central Bank. Our adherence to the euro and the ECB have given us such an opportunity and I thought it would be useful to consider not just those aspects of the bank's role which relate to the European Central Bank and the euro but also to look at other aspects of its regulation and the information we receive about how it does its job.
As a result of the independence we have given the Central Bank, I hope that, in time, the bank and the governor will be more vocal about our economic policy. I hope that we will have a position where the governor will not feel constrained to automatically parrot everything coming from officials of the Department of Finance or the Minister, as is already the case.
The Governor of the Central Bank is independent and it is a gross insult to imply otherwise.
I have never heard the governor say anything that was inconsistent with what was being said by the Department of Finance. Perhaps that is likely to be the case in so far as the bank, the Department and the Minister are working from the same hymn sheet. In Germany, the Bundesbank and the Government, the two centres of economic policy making, do not always say the same thing. This is healthy. It contributes to public debate and we should encourage a similar practice here.
I cannot allow the implication to remain on the record of the House that the current Governor of the Central Bank or any of his predecessors ever parroted what came from the Minister or the Department of Finance. The Governor and the Central Bank are completely independent of the Department of Finance, the Minister and the Government. It would be incorrect to allow the allegation to remain on the record of the House and I reject it.
I do not accept what the Minister is saying. In general, the Governor and the Minister have spoken from the same hymn sheet. That is likely when we have something approaching consensus on how we drive economic policy. I am not being especially critical of that practice. It is inevitable and I am not suggesting that the governor is not exercising his functions independently or looking to parrot the Minister's comments. I appreciate the opportunity the Minister has given me to clarify that point. However, perhaps because of the closeness of the two institutions and the way in which they have grown over the years, it is inevitable that they should give a similar line. That is part of our history and it is not necessarily bad. However, that is likely to change in the future given the manner in which the Minister has reconstituted the bank as entirely independent.
The Minister stated that the bank is independent. That is not entirely true. There is a mechanism for consultation with the Minister. The Secretary General of the Department of Finance is a member of the board of the Central Bank and there is a close relationship, which has generally been positive. I do not want to criticise them but there is a greater likelihood in the future that the two central Departments which drive our economic policy will give somewhat different views in public. I accept that this is not specifically related to the amendment.
If the Deputy was a Member when Oliver J. Flanagan was here he would know all about the art of filibustering. I caution him against engaging in an art form which is long since dead.
I bow to the Minister's superior knowledge and experience in these matters.
In circumstances where the bank has been constituted as an independent body with an independent decision-making process, it is important that the Freedom of Information Act should apply as soon as possible. I accept the Minister's statement that he does not object in principle to my proposal and hope he will make the necessary regulations as soon as possible.
Amendment put and declared lost.
Question proposed: "That the Bill do now pass."
I thank the Deputies who contributed to the debate on Second, Committee and Report Stages. I also thank the Bills Office, the Office of the Attorney General, the parliamentary draftsman and their officials for their assistance in drafting this important legislation which is a prerequisite for membership of EMU.
Fine Gael welcomes the Bill which is an important step in our preparations for membership of EMU. The Central Bank faces a huge task over the next 18 months. While I regret the Minister did not accept our Committee Stage amendments, I am happy with the amendments made to the Bill.
I join with the Minister and Deputy Perry in welcoming the passage of this important Bill. I thank the Minister for his co-operation during the debate. I am sorry he did not accept more of my amendments but I may have an opportunity to try to amend the Bill another day. I also thank the Minister for allowing his officials to brief me at an early stage and the officials who briefed me.
Question put and agreed to.