Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

Members are aware that there is legislation to deal with these issues. However, I note that no auditor has as yet been held liable for some of the banking failures here. My point is that there have been banking failures in Europe where everyone agrees that a new resolution mechanism is needed to have in place a fund, funded by the industry, in order that taxpayers will not be caught next time around. That is a good lesson to learn. Surely, however, there is another lesson to be learned from what happened in the past. As the fund is being set up, it is accepted that this could happen again. One past failure was that the auditors certified accounts as being true and fair almost right up until the end. As part of this process, there should be new rules to deal with that issue. If one suggests this is not an issue, one is suggesting there is no need to learn lessons about that aspect of what went wrong.

I will conclude with one last point. I acknowledge it is late on a Thursday evening.

If there is no provision in these new procedures whereby directors who are guilty of fraudulent or negligent activity can face criminal prosecutions, we are saying to everybody, "Carry on regardless". We know what happened in Ireland. Most of them got off. I will not comment on any cases. If there is a situation where a bank requires resolution, the question is whether this legislation will include provisions for legal sanctions against such persons. I am not only talking about barring them from future directorships. Will there be a mechanism in place where they can be brought to account? It is not fair on the customers of the banks who will pay, not ultimately but initially, for this fund. They should at least have the satisfaction of knowing that about the directors of those institutions whose work, if careless or negligent, results in their banks having to be liquidated and go through the resolution process. From an Irish perspective, having been through more of the pain involved than most other EU countries, we have probably one of the riches perspectives to bring to this debate. One of the lessons that we have learned is that those who caused the problem should be accountable.

If there are not mechanisms in this, it is all well and good to propose the setting up of a fund and if a bank misbehaves again and goes bust at least there is such a fund. That is fine in so far as it goes but it is not fine that the directors feel there is no sanction against them. I want to know what sanctions - whether they are legal and court sanctions - can there be against the directors of institutions. Some of them might merely be due to trading circumstances or where there is a fraud committed against them. Some of it may not be their fault, if an institution goes down. It could be due to matters outside their control. If there is a Ponzi scheme being operated by some directors of some bank, one would need to know this mechanism is not merely a method of bailing out or having a fund in place to pick up the problems. Those who caused the problem should be brought to book. What provisions are in the proposal in that regard?