Joan Burton (Dublin West, Labour)

I move amendmentNo. 2:

In page 5, subsection (4)(a), line 8, after "offence," to insert the following:

"in particular any penalty provided by regulation 188 of the European Communities (Markets in Financial Instruments) Regulations 2007 (S.I. No. 60 of 2007),".

This area of the Bill provides for a €10 million fine for failing to retain records and other offences, some of which could be quite minor. The amendment seeks to clarify that all of these offences are summary offences under Regulation No. 188 of the 2007 regulations. There is also an inconsistency in the wording of section 9(3), which mentions summary penalties under the regulation referred to in section 9.

As we discussed previously regarding this Bill, a fine of €10 million could be regarded as very small in the realm of financial services. The Minister glossed over some facts when he said our reputation concerning the financial services centre is very good and I remind him that the Ormond investment vehicle went down for several billion euro due to the type of loan it had accumulated. Were it not for German state banks, such as Sachsen, I am not sure what might have happened but the entire affair was questionable.

Mr. Michael McDowell chaired the committee that brought in the report that led to the initiation of the Financial Services Regulatory Authority. The report referred to regulation with a light hand and the issue here is the Minister's approach to regulation. In terms of the kind of money deposited in the financial services centre the fines mentioned in the Bill are in one sense very small, however, for a small Irish operator they could be very large. We have no indication of how the Minister is thinking in this regard. I remind him that in recent years we saw the issue of reinsurance as it related to Swiss Re and that Ireland featured prominently in several Wall Street Journal stories on how regulation did not work in the financial services centre.

What is the Minister's approach to regulation? Does he speak to the Governor of the Central Bank or do his officials speak to representatives of the Central Bank? Does the Minister or do his officials liaise with the Financial services regulator? We are trying to compete in a globalised financial services market and we want long-term stability and employment and a good reputation, rather than hot money that comes and goes with spectacular crashes. Can the Minister indicate what his thinking is in this regard? He is normally given to expressing himself clearly but is very coy, almost shy, with regard to this topic and that is most out of character for him.

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