Ciarán Lynch (Cork South Central, Labour) | Oireachtas source

There were three items that were referred to over the course of the meeting. On the question of CRD IV, the credit requirements directive, we need an explanation as to how the senior executives and the senior staff in the Bank of Ireland were able to get bonuses through their remuneration structures. As I interpret it, that decision runs contrary to the directive. I request that the committee be informed as to whether that decision was in line with CRD IV. The input of the stakeholder management unit may be required to establish what informed that decision. We may call the Department's stakeholder management unit before the committee to explain that decision in greater detail.

Second, an issue I addressed in my opening remarks, and to which Senator Barrett and others referred, is the contamination of retail banking by merchant banking. Under the heading of preparation and prevention, in which Mr. Carrigan stated:

Third, if authorities identify obstacles to resolvability in the course of this planning process, they can require a bank to change its legal or operational structures to ensure that it can be resolved with the available tools in a way that does not compromise critical functions, threaten financial stability, or involve costs to the taxpayer.

What does this mean in layman's language, in terms of splitting retail banking from merchant banking? As I said to Mr. Dempsey, it is critical that the committee be briefed on whether the Central Bank is carrying out this type of audit. When AIB and Bank of Ireland representatives came before the committee in November of last year, they were asked whether they were gong through their distressed mortgage book, and their answer was "Not necessarily."

When the Governor of the Central Bank appeared before the committee earlier this year he did not really speak about targets. As a result we had to put targets in place. It is critical that the banks carry out this type of audit and I would hope the Central Bank is giving a direction in this regard at this time. This is an issue we will certainly follow up on because this type of separation needs to take place. It is not something that needs to be moved down the line but it is a matter on which the banks themselves should be proactive. If Mr. Carrigan or any other member of the team wish to make some final comments they are welcome to do so. In regard to the residential mortgage guidelines issued by the Central Bank of Ireland in July 2009, what level of monitoring has been put in place?