Tom Barry (Cork East, Fine Gael)

I welcome the opportunity to speak on the Bill. It will provide for enhanced powers to the Central Bank of Ireland with regards to supervision of regulated service providers and it will also enhance the powers of the Central Bank in the enforcement of financial services legislation. It is yet another Bill to address an area that has been pinpointed by the IMF as one in need of reform. That is something we have become used to saying but it is a key area.

For most of us there is a realisation that the IMF was stating the obvious. Reform in the area is critical to bringing back confidence and especially credibility to our financial sector. Under the new Government there has been a determination to first establish how deep the financial problem was and is and, second, to address it. It is scarcely two years ago that the then Minister for Finance, the late Brian Lenihan, reiterated that this country's top two banks were solvent and working well. That was and is untrue. I wonder whether it was political naivety or the dissemination of misinformation that brought about the situation. It is not however simply a matter of tightening regulations. The individuals who oversee the application of the regulations must ensure that we do more than just tick the boxes. It is about making sensible and correct decisions within the parameters of the regulations. That is where our system has failed us so badly in the past.

Most people have memories of how the previous Financial Regulator drew large sums of money in pension and lump sum entitlements. I referred to a similar situation last week with regard to another individual. The previous Financial Regulator received a lump sum payment of €630,000 and an annual pension of €142,000, yet after receiving those public moneys he refused to meet with the Oireachtas Joint Committee on Finance and the Public Service to answer questions on his conduct and the conduct of his staff. Bar the Committee of Public Accounts, committees past and present, even though the regulator may not have wanted to address them, were perceived as being toothless with the power only to report their findings to the Dáil. It is worth reminding people of the attitude taken by certain sectors and individuals who were asked to attend such committees in the past. This is a timely reminder in the context of tomorrow's referendum which proposes to extend the powers of committees.

Part 2 allows for skilled persons to be employed to investigate firms that provide financial services, the cost to be borne by the firms in question. The skilled person can be an auditor, actuary, accountant, lawyer or person of relevant business experience. Therefore, when the Central Bank seeks information we will know that it will get truthful and concise information. We must have information on which we can rely and trust because as with a business one can only work on correct figures. Otherwise, a Minister could say something in the House when in fact the opposite is true. It will be an offence to obstruct these people. We must legislate in minute detail to ensure that what happened in the past is not repeated.

Part 3 defines the powers of the authorised officers. These are extensive. They are allowed to enter any premises where they believe relevant records are kept but they will require a warrant to enter a private dwelling. Authorised officers may also attend meetings of regulated financial providers. When officers remove records, which they must do, they must provide a copy of the documents or return them within 14 days. I am concerned that 14 days might be a little too long. Perhaps copies should be done immediately and returned within seven days. These days it is quite easy to make copies of documents. We do not want the operations of these authorised officers to obstruct normal business.

Part 4 allows for protected disclosures. There will be protection for a person who, in good faith, relays information regarding what he or she believes to be an offence under the financial services legislation. We do not want to see a repeat of the Eugene McErlean case. In 2001 Mr. McErlean, a group internal auditor of Allied Irish Bank, conducted a report into charges and uncovered a major overcharging problem. He was victimised and lost his job. The episode was like something that might happen in a Third World country. Unfortunately, it happened in Ireland. We cannot forget the past when we address problems and look to the future. Mr. McErlean was vindicated but the incident caused him enormous distress. The Criminal Justice Act 2011 relating to white collar crime will address bad behaviour in white collar crime. We need to be able to trust our banks. We need to make sure the information provided and given to line Ministers is correct. We must not see recent failings repeated in the future.

We have seen the introduction of stiff regulation in the agriculture industry, and it has worked out well. Irish agriculture is now flying, but it is going well only because we have strict regulation. It took a long time to accept regulation but we are now regarded as major food players for quality and procedures all over the world. If we get regulation right our banking industry may, in time, be seen in the same light, even though many see that as a far away field.

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