Kieran O'Donnell (Limerick City, Fine Gael)

I am pleased to be able to contribute on this welcome Bill. To put it in context, consider what has happened in the banks in recent years. A key component of the financial crisis was the lack of proper regulation. For example, two people are in business together. Both have young families. One person does not abide by the rules whereas the other tries to abide by them. If the latter does not go along with the former, he or she does not get any business. If there is proper regulation, the pitch is levelled for the good person.

The problem is that not only were the banks reckless, but there was no enforcement or regulation. We still do not know the full circumstances surrounding the former Financial Regulator's activities in respect of the banks. In the fullness of time, I hope this information will come out in a proper banking inquiry. We need to know the full details.

Parts 2 and 3 relate to the report of a skilled person, an important matter. Part 4 is also important. A Deputy referred to Mr. Eugene McErlean, a decent and honourable man who worked at a bank. People working in banks throughout the country knew there were major problems with the level of borrowings. Instead of having their opinions taken on board, they were told to accept and send applications up the line. It is important that whistleblowers be protected.

Two components of the Bill are worthy of comment. These are the power to give direction under Part 5 and the power given to the Central Bank to make regulations. I caution that we should not have regulation for the sake of regulation. We want a financial system that is sound and prudently regulated and can operate in a competitive global market. We have a significant financial services industry and must ensure that regulation does not make the banks and financial institutions uncompetitive. This issue must be taken on board if we are to maintain our competitiveness.

I welcome the Minister's amendments to recent legislation on credit unions and his indication that upcoming legislation will be referred to the commission on credit unions for review. It is important that we retain the ethos of the credit union system while ensuring credit unions are on a sound financial footing and remain competitive.

I welcome the broad thrust of the Bill, which will play an important role in the architecture of our financial services sector. It will strengthen the sector's international competitiveness. However, where regulation is enforced, we must examine its effect. When the Governor of the Central Bank examined previous regulation, he gave the impression that there was general formal regulation but did not go into specific detail. For this reason the reports of suitably skilled people will be important. This interactive process will involve the regulator, the Central Bank and the financial institutions so that they might have a better understanding of the industry and will help to ensure that the interests of the customer can be protected. The latter point is paramount. When international observers consider Ireland, they will see a well regulated, competent and competitive financial sector.

See this speech in context