Oireachtas Joint and Select Committees

Wednesday, 3 November 2021

Joint Oireachtas Committee on Finance, Public Expenditure and Reform, and Taoiseach

General Scheme of the Central Bank (Individual Accountability Framework) Bill 2021: Central Bank

Photo of Peadar TóibínPeadar Tóibín (Meath West, Aontú)
Link to this: Individually | In context | Oireachtas source

I strongly believe that we suffered from light-touch regulation throughout the past 20 years, especially in the run-up to the banking crisis, and that cost us severely as a country. However, sometimes regulation can become cyclical and there can nearly be a pro-cyclical regulatory experience. After a major crash or difficulty, regulation becomes very tight. One can see that is almost the case in the banking system currently in terms of the capital ratios that are in force in this State and the effect that is having on the banking industry.

In reply to earlier questions, our guests talked about adverse effects the Bill could have. I am not suggesting for a second that the Bill goes too far; it does not. What research have the witnesses done in respect of potential adverse effects? I am thinking of potential vexatious behaviours that could happen within an organisation. If the responsibility of an individual at a certain level is to bring an issue up to higher levels within a firm and that person exhausts every opportunity in that regard, he or she potentially reduces his or her own liability for an act or wrongdoing and that pushes the liability onto somebody else up the food chain in that firm. Is there any understanding of what could happen in firms in that regard? Mr. Cross mentioned that this regulation differs from the British regulation in that non-executive directors are made responsible under the Bill. Will that have potential competition effects in the context of Irish firms?