Vol. 503 No. 3
65 Ms Clune asked the Minister for Finance when he expects a report from the committee being chaired by Mr. Michael McDowell, SC, on the regulation of the financial services industry; and if he will make a statement on the matter. [10030/99]
On 20 October 1998 the Government agreed in principle to the establishment of a single regulatory authority for the financial services sector at the earliest date possible. An implementation advisory group was subsequently set up under the chairmanship of Michael McDowell, SC, to progress the necessary work.
The Deputy will be aware from my reply to her parliamentary question on 25 February last that, due to its complex and wide-ranging remit and the extensive consultations it is undertaking with interested parties, the group indicated it would not be able to meet the end of February deadline and sought approval for submission of its report to take place in April 1999. That request was acceded to.
To date I have not received the group's report. However, I expect to receive it before the end of this month.
This is a particularly active and hard working group. It commenced work on 5 November 1998 and to date has held 17 meetings. The financial services sector is critically important for Ireland's modern economy and it is, therefore, vital that the group be given the time to do a thorough job, regardless of how long it might take. Nevertheless, I am assured the report should be ready by the end of April.
Given that the Minister is well represented on the committee through a senior member of his Department, could the approach being adopted be described as one in which the regulatory authority would subsume the work of the Central Bank? Alternatively, could the regulatory authority, in effect, be the Central Bank with a subsidiary of the bank carrying out those functions which many of us believe are not being adequately dealt with at present?
I presume Deputy Noonan is not trying to be mischievous in the phrasing of his question. We will await the report of the committee to see what it says. It will be noted that one of terms of reference of the group is to advise the Government on the extent, if any, to which existing regulators, for example, the Director of Consumer Affairs, the Registrar of Friendly Societies, the Central Bank and the Department of Enterprise, Trade and Employment, would continue to have functions in relation to regulation of the financial services sector and the extent to which any alteration in the status quo would impinge on the non-regulatory functions of the Central Bank. I do not think we will have much longer to wait before receiving the deliberations of the committee. When the report is presented to myself and the Tánaiste it will be brought to the Government for further deliberation and we will have further opportunities for debating some of the ideas put forward by the Deputy.
The Minister correctly pointed out that the Government decision was taken six months ago and that the committee is an implementation group. Given this, can I take it the Minister expects to act on foot of the recommendations made by the committee and that in ten days' time we will not be facing the establishment of yet another ad hoc interdepartmental or departmental advisory group to examine the implementation of the report?
The press release of 20 October stated the Government had agreed in principle to the establishment of a single regulatory authority for the financial services sector at the earliest possible date, and to the immediate establishment of the implementation advisory group to progress the necessary work. Therefore, the decision on the principle of a single regulatory authority has already been taken by the Government. The committee, chaired by Michael McDowell, is an advis ory group to progress the necessary work along the lines of the terms of reference given it at the time. Once the advisory group reports, it will be a matter for the Government to make a decision.
Does the Minister anticipate the establishment of a further advisory group when he receives the report?
I do not anticipate recommending to the Government that we have further advisory groups. The major decision was to establish a single regulatory authority. The current committee is an advisory group concerning implementation. There is much debate as to how the single authority will be established, something referred to by Deputy Noonan in his question. I do not wish to anticipate the report of the committee. The Government must make a decision on foot of the report of the advisory group. We should await the report.
Has the Minister instructed the official representing him on the committee to follow a particular line of policy or, to put it bluntly, will the Department of Finance support the position of the Central Bank or the position of the Department of Enterprise, Trade and Employment?
The reason for establishing a nine person advisory group was to have as wide a range of views as possible while at the same time ensuring the group is as focused as possible. Let us await the report to see what the great minds come up with.
Which side is the Minister on?
