Bernard J. Durkan
Ceist:114 Mr. Durkan asked the Minister for Finance if recent developments have presented potential security risks in international banking; and if he will make a statement on the matter. [7426/05]
Amharc ar fhreagraThursday, 3 March 2005
Ceisteanna (114, 115)
Freagraí scríofa
The recent developments which are currently the subject of a Garda investigation and widespread publicity, must be viewed in perspective. There is no evidence to date that these activities are of a scale or volume that would pose potential security risks in international banking. Similarly, there is no evidence of any significant involvement, whether deliberate or inadvertent, of the national or international banking systems in these activities.
These developments highlight the need for all institutions and supervisory authorities to remain alert to unwelcome activity of any kind which could pose a risk to the security or reputation of individual institutions or the banking system.
Bernard J. Durkan
Ceist:115 Mr. Durkan asked the Minister for Finance if he is satisfied that adequate legislation is available to ensure that the banking system is secure; and if he will make a statement on the matter. [7427/05]
Amharc ar fhreagraThe Central Bank and Financial Services Authority of Ireland Act 2003 established the Irish Financial Services Regulatory Authority. The post of consumer director is specifically provided for within the structure of the financial regulator established under that Act. The director exercises important consumer protection powers under legislation.
The Central Bank and Financial Services Authority of Ireland Act 2004, complemented the 2003 Act, further enhanced the financial regulator's powers and strengthened the regulatory environment. This Act conferred new powers on the financial regulator to impose stiff administrative penalties, to be applied where there is a breach of: any financial services legislation; codes of conduct issued by the regulator; or any condition, requirement or direction imposed under legislation or codes.
The Act provided for an enhanced structure for dealing with consumers who have complaints about financial institutions and also provides consumer and industry consultative panels for the financial regulator. The consumer panel will have an important role in ensuring that the regulator is correctly reflecting the interests of consumers in its protective — issue of codes of conduct — and educational — information pamphlets etc. — roles. The Act also established a single statutory Financial Services Ombudsman for all financial services firms. The ombudsman's office is due to begin operations on the 1 April 2005. The financial ombudsman will have power to order redress in appropriate circumstances.
The Consumer Credit Act 1995, which commenced in May 1996, regulates the provision of consumer credit. It prescribes, inter alia, the form and content of credit agreements for consumer lending, including in the case of loans secured on the family home a requirement to warn the borrower about the risk of losing their home. The Act also provides for the regulation of fees and charges imposed by credit institutions.
In addition to the specific regulatory requirements under the Central Bank and consumer credit legislation, credit institutions are also subject to specific requirements to know their customers, keep records and report suspicions of money laundering under criminal justice legislation. Their professional advisers, such as accountants and solicitors, are also subject to these reporting requirements. All companies are subject to the enhanced company law regime that has been put in place in recent years, including the oversight role of the Director of Corporate Enforcement.
I am satisfied that the provisions now available in law provide not just for the effective regulation of the way that credit institutions conduct their business but also for effective supervision and enforcement of the law where necessary. I am open to making suitable amendments to the law, if the need arises. In this regard I have asked the financial regulator to advise me as soon as possible if anything emerges from recent developments in relation to asset based lending that in their view would require a legislative change. The forthcoming Bill to consolidate and modernise our financial services legislation could offer a suitable vehicle for such amendments.