Mr. Raymond Byrne:

In different countries the issue of individual accountability is being dealt with differently. One could say there are different proportions when Ireland and Iceland are compared. On the other hand, there have been a number of significant prosecutions and convictions. In looking at this very wide-ranging issue, the commission recognised that there was the issue around corporate liability and personal liability of senior managers, and then also the kinds of tools that regulators in the financial and economic sector need in order to have effective preventive measures in place.

We also recognise that this is very much a complex jigsaw and that, as has been said before, since 2008 there have been quite a significant number of reforms in the financial services area and additional powers given to the Central Bank in order to monitor the extent to which activities now being carried out by banks are prohibited by law. Going back to something like the situation that arose before 2008, it was quite clear from the analysis the commission carried out that there were two issues there. One was that the regulator was operating under what was called a principles approach to regulation, which was in effect light-touch regulation. Furthermore, the resources the Central Bank had were very limited in terms of being able even to use the powers it did have. Those are certain matters regarding whether the system is effective, the resourcing of that system and the capacity to implement those powers in practice.

From that point of view, regarding the effectiveness of the reforms that have already been enacted and the proposals being made to fill the gaps in regulators' powers, I appreciate that many people were very unhappy about the length of time it has taken to address the tracker mortgage scandal, for example. Equally, however, the Central Bank could not have put in place the examination it did put in place or the requirement to enter into a tracker mortgage redress scheme for consumers and to pay them back the money that had been taken from them if the Central Bank was just going into banks and telling them that morally, they should pay the money back. The Central Bank had to be able to tell them that breaches of the legislation had occurred, that offences had potentially been committed and that if they did not pay the money back, other powers could be used. In this context, those regulatory powers have been applied and put into place. The question is the extent to which there should be individual accountability in terms of criminal prosecutions. This is of course very important but we now have examples, which we never had in the past, of situations in which very senior people, including chief executive officers, have been prosecuted and convicted. The cost of these prosecutions is very high. By comparison, I think the international literature points to the role of the regulatory powers and the presence of a very clearly well-resourced financial regulator now in the Central Bank, including the proposals the Central Bank itself has made regarding the senior manager accountability offence that it proposed in its report last year. Again, we do not address that in our report because the Central Bank had already made that proposal. All those different elements of that jigsaw, including what we would see as the need to tidy up the issue of corporate and senior manager liability as a general principle, are very important from a preventative point of view. They might not guarantee that the kind of collapse that occurred previously would not happen. Regarding resourcing and the granting of effective powers, however, the literature the commission has looked at internationally shows that those kinds of powers, such as financial sanctions and the ability to require regulatory settlements to be entered into, are extremely important and quite effective and, from a citizen's point of view, possibly the most efficient methods of ensuring-----