Mr. Joe O'Toole:

The Deputy raised an interesting point about who should pay. The Government is enthusiastic about a European wide initiative under which the regulated pay for being regulated. The fact that the cost is split 60:40 will never happen again. The Oireachtas is about to pass legislation which will require credit unions to pay completely for all their regulation and there is a strong argument that should not be case. They feel the regulation should be paid for by the Government. It is similar to audit rotation. It is one of these imperfect arguments. One can argue up and down on both sides of it but the current view is that the people who are being regulated should pay for it.

The Deputy also referred to the expectation gap. As he said, if somebody did their job incorrectly and we overlooked that, should we not have to take responsibility? That is a fair point but we have to find out where everything went wrong. He outlined our annual budget and he has the list of the number of companies we work for. The largest bodies around the world such as Fitch Ratings and others gave banks the highest rating through their own devices and not based on what we were telling them over the previous few years. That gives some idea about how hard it is to get to the bottom of these issues but the most important issue is that no matter what legislation we bring in or what level of regulation we apply or inspections we provide for, that will never eradicate criminal activity. Where this becomes important is that the auditor will only do what he or she is required to do under the regulations and he or she can only deal with the information given to him or her. The Deputy makes a reasonable point about whether he or she should be able to find stuff under the carpet and asked whether stuff that should be obvious is not obvious. He also asked whether there is stuff that we as regulators need to know and that is what this meeting is about. We think that to fill the expectation gap, the position can be improved but nobody here will say that an international company, no matter how good their auditors are, will root out somebody in a back office in Johannesburg who is not playing the game fairly. Trust and confidence is the most important element. If there is not trust and confidence in the system, it cannot and will not work. We agree with the Deputy that this is what auditors, accountants and IASA have to do. We have to win trust. We are rightly being questioned about what went wrong. There is a system of regulation. Why it did not root these problems is the question we are trying to answer. We are as uncomfortable about aspects of this as the Deputy.