Paul Gavan (Sinn Fein) | Oireachtas source

As we know all too well, customers of banking and financial services have not been afforded that protection or been confident that individuals will be held to account when they fall victim of mistreatment, mismanagement or overcharging by financial institutions. More than a decade since the Irish banking sector plunged our economy into crisis, it is truly shocking that we are only now reaching the final stages of legislation that would allow senior bank and financial services executives to be held to account for their failures. We have witnessed a tracker mortgage scandal, which left 40,000 customers overcharged and many losing their family homes. Public trust in the banking sector can only be restored when the culture at the heart of our banks changes. That can only happen by ensuring individuals are held to account for failures when they occur.

An individual accountability regime was introduced in Britain in 2016 in the form of the senior managers and certification regime, and in Australia in 2017 with the introduction of the banking executive accountability regime.In January 2017, Sinn Féin tabled a motion in the Dáil that called for legislation that would ensure individuals and financial institutions could be held to account. In July 2018, the Central Bank published its report on the behaviour and culture of the Irish retail banks on foot of the tracker mortgage scandal. Its recommendations included legislation introducing a new individual accountability framework, including new conduct standards; a senior executive accountability regime and enhancements to the fitness and probity regime and the enforcement process. These are recommendations to ensure that senior bankers could be held to account for their actions.

We are considering this legislation over four years since that report was published. It is an indictment of the lack of priority that Governments have placed on this issue but, finally, the legislation is before us. The Bill grants regulation-making powers to the Central Bank to effectively implement the individual accountability framework, IAF, in respect of senior executives in regulated financial service providers. It sets out four key pillars to the IAF, namely the new senior executive accountability regime; new conduct standards for regulated financial service providers and their management and staff; enhancement to the Central Bank's fitness and probity regime; and stronger enforcement capabilities for the Central Bank. The senior executive accountability regime, SEAR, will be introduced mainly by amendments to the Central Bank Act 2013. The Bill provides regulation-making powers to the Central Bank with the bank to set out details of allocated responsibilities and requirements regarding management responsibility maps and statements of responsibility. The Bill does not set out the sectors to be included in the SEAR. This will be set out by the Central Bank regulations, although it is intended that the SEAR would initially apply to banks, insurers and certain investment firms. We await the sectors to be included in these regulations but we hope they will be expansive.

We are aware that in Australia, plans are under way to extend its banking accountability regime to other financial services and entities following recommendations from the Hayne Royal Commission. Similarly, it will be important to ensure that the scope of these regulations are kept under constant review.

I will raise a few brief issues with the Minister of State as we work through this Bill. First, my colleague, Deputy Doherty raised the issue of training that will need to be undertaken within firms to ensure that those were responsibilities under the legislation can implement its requirements. The second is the choice of six years as the duration for which an individual can have left the role and still be subject to Central Bank investigation. Many issues have not come to light under such a time, which could pose a problem for ensuring accountability after the fact.

Section 15 relates to discontinuation of an investigation for a reason of lack of resources. This would not be acceptable with respect to a Garda investigation and we can see little reason for it to be acceptable in this instance. Again, we would ask the Minister of State to re-examine that provision.

The legislation is welcome but long overdue. Regulators and the public have waited far too long for legislation that will finally enable the regulators to hold senior bankers to account. Those subject to untold and significant harm at the hands of our banking industry have had to suffer while those responsible go unnamed and unpunished. That should never have happened.