As the Deputy will be aware, during the week commencing October 23rd I met with the CEOs of the largest five retail banks operating in Ireland, in order to spur quick and appropriate resolution to issues raised during the Central Bank's review into Tracker Mortgages. It was clear to me, following those meetings, that significant cultural issues and challenges in some of the retail banks still exist. Customer interests have not always been sufficiently protected or prioritised and this is unacceptable.
I have therefore mandated the Central Bank under section 6A of the Central Bank Act to prepare a report for me on the current cultures and behaviours and the associated risks in the retail banks today and the actions that may be taken to ensure that banks prioritise customer interests in the future.
On foot of this report, the Government will determine whether any additional legislative and regulatory changes are needed that would enhance accountability in the banks for ensuring customer interests are prioritised. I will await the recommendations of this report before determining how best to proceed.
As the Deputy will be aware, the State continues to have the ability to appoint directors to banks in which we have a large shareholding. My officials have been developing new procedures for any future appointments to bank boards, that will address the commitment in the Programme for Partnership Government to, “Cease to appoint new Public Interest Directors to the banks, and reform the procedures for the appointment of bank directors by the State, with a view to increasing transparency in the process".
It is important to note that any new appointment procedure for bank directors needs to have due regard to the distinct differences which exist relative to appointments to State boards. These include the fact that the State is not the only shareholder in these banks, the strict requirements of the Single Supervisory Mechanism's Fitness and Probity regime and the requirement to have a broad set of expertise relevant to large regulated entities in an ever more complex regulatory environment.
