Mick Wallace (Wexford, Independent) | Oireachtas source

I, too, welcome the Bill introduced by Deputy Pearse Doherty and Sinn Féin, which proposes to provide powers to the Central Bank of Ireland to conduct inquiries into the suspected provision to it of false or misleading information and to provide that sanctions may be imposed by the Central Bank on bodies that provide false information. While I agree with the spirit of the Bill and understand what Deputy Doherty is trying to do, I have concerns that the additional powers provided would not be put to use as the Central Bank would not be under any obligation to use them.

The Bill is directly linked to the tracker mortgage scandal. It has taken the Central Bank a long time to get a handle on this issue and there are other areas in which it has also let down consumers. For example, its response to Ulster Bank and the Global Restructuring Group, GRG, has been highly disappointing. As Deputies are aware, Bank of Scotland in the United Kingdom and Ulster Bank in Ireland purposely drove small and medium business owners out of business in order that the banks could take over the companies. The Financial Conduct Authority, FCA, in the UK conducted a review of Bank of Scotland and the GRG but has, to date, refused to release the unredacted version of its report. Thankfully, an unredacted version was leaked on Monday last and it makes for frightening reading. The FCA has been correctly pilloried for not publishing the unredacted version. However, if we compare its response with that of the Central Bank of Ireland, we find that the matter has not even been investigated in this country. I wrote to the Central Bank of Ireland about its response to the GRG last summer and it informed me that it was engaging with Ulster Bank on the matter and would continue to monitor the matter and oversee complaints received by Ulster Bank for any issues arising, particularly in the context of compliance with the code.

The Central Bank also told me it engaged with the Financial Conduct Authority, FCA, in its report on the Global Restructuring Group, GRG. Has the Central Bank seen a copy of the final version of the FCA report? I assume it has been shared with it, and this makes it all the more worrying that it has failed to act. Instead, it allowed Ulster Bank in Ireland to deal with the matter itself. It stood idly by as Ulster Bank commissioned a report by Mason, Hayes and Curran into its role in GRG, and the report cleared it of any wrong-doing; it was a whitewash. The law firm in question had a clear conflict of interest as it previously represented Cerberus, the infamous vulture fund, with its purchase of a loan portfolio called Project Aran, which contained assets from the Irish element of Ulster Bank and GRG loans. I have a copy of it but it has never been published officially, just selectively leaked to the media. The full FCA report, leaked on Monday, has shown the Mason, Hayes and Curran review as a farce.

The legislation is available to the Central Bank but it has failed to use it. Small and medium businesses are supposed to be protected under the code of conduct for business lending to small and medium enterprises for 2009 and the Central Bank (Supervision and Enforcement) Act 2013. Instead, the Central Bank tells us it is engaging and monitoring the issue. The Central Bank is supposed to be an oversight body and it states on its website that the protection of SME customers is a priority. This legislation will provide powers to the Central Bank but will it use them? Perhaps it is time for a complete change in the direction of the Central Bank's operations. It must be a proper oversight body that acts quickly and sanctions banks for wrong-doing, not one which allows banks to investigate matters themselves. Until this happens, we will continue to see a Central Bank that is a soft touch and almost afraid to upset the commercial banks in Ireland.

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