John Gormley
Ceist:62 Mr. Gormley asked the Minister for Finance his policy on encouraging or discouraging further bank mergers in the financial sector here. [24813/04]
Amharc ar fhreagraThursday, 14 October 2004
Ceisteanna (65)
Freagraí scríofa
The Government has not adopted any policy stance either encouraging or discouraging further mergers or takeovers in the banking sector. Any such proposal would fall to be considered in accordance with the provisions of national and EU competition legislation and also under banking regulation legislation.
Where any acquisition would involve more than a 10% stake in a bank, the Irish Financial Services Regulatory Authority, IFSRA, is required to make a decision as to whether to approve the takeover from the point of view of the orderly and proper regulation of banking. The Minister for Finance must approve mergers involving more than 20% of total banking assets in the State, after consulting the Minister for Enterprise, Trade and Employment.
Separately, various competition rules apply. The Irish Competition Authority or the EU Commission must generally also give a clearance.
It is, of course, essential that any new entity be properly managed and regulated, and the legislative provisions for this regulation have been much enhanced over the past two years. The Central Bank and Financial Services Authority of Ireland Acts 2003 and 2004 represent a radical restructuring of financial regulation in Ireland: for example, the establishment of a single structure to take in work previously done by four separate bodies, the greater emphasis on consumer concerns, the enhancement of the regulator's powers, including in administrative sanctions, enhanced provision for co-operation between the various authorities, the provision for establishment of a statutory financial services ombudsman scheme and of new consultative mechanisms for consumers and industry. All of these achievements will contribute to the better regulation of the sector.
However, it is my intention, of course, to learn from the experience of the operation of IFSRA and from various recent and expected reports, so as to keep our legislative framework efficient and up to date. I have recently initiated a public consultation process with a view to consolidating, simplifying and updating our financial services legislation. My ongoing aim is to ensure that our legislation continues to meet the Government's consumer protection and stability objectives in a way that minimises the regulatory burden on industry and otherwise complies with the Government's better regulation agenda, and promotes the development of a sector that is competitive both domestically and internationally and operates to high standards.