Micheál Martin (Cork South Central, Fianna Fail) | Oireachtas source

I thank the Deputy for raising what is a very important issue. The behaviour by Davy executives was absolutely unacceptable and, I think, reveals an appalling culture of greed, and has damaged the reputation of the financial services sector in this country. Executives in business or in financial services should never put personal gain above their duties and responsibilities. I think the NTMA made the right decision in regard to its relationship with Davy and in severing that in respect of the issuing of bonds. I would say, in the context of the NTMA decision, that is exactly the consequence that I had in mind when I made my comments. A Central Bank investigation will have an impact but it is absolutely unacceptable, first, that this has been ongoing since 2014 and that the executives sought to frustrate the efforts of the Central Bank and of the regulator to get to the truth of this issue, and to bring this issue to a conclusion. I agree with the NTMA in terms of withdrawing Davy’s authority to act as a primary dealer for Irish Government bonds. That was the correct decision and the NTMA will no longer be doing business with Davy.

On the issue of individual accountability, the Central Bank does have extensive powers to sanction individuals who are involved in the management of financial services firms and who breach financial services legislation. That said, we believe the existing financial legal framework to hold individuals responsible for their behaviour needs strengthening and, in the programme for Government, provision has been made for the introduction of legislation in regard to a senior executive accountability regime, SEAR, to deliver heightened accountability in the financial sector. The Government will be publishing the heads of that Bill soon. That, in itself, will drive further positive changes in terms of culture in the financial services industry and enhanced accountability, while simplifying the taking of sanctions against individuals who fail in their financial sector roles.

Davy has said it no longer employs any of the 16 individuals involved in that 2014 transaction and that it will appoint a third party imminently to conduct a review of the findings of the Central Bank. Clearly, Davy has an awful lot of work to do to rebuild public trust.

Deputy McDonald's party is making a point about strengthening regulation and I agree with that but the Deputy needs to practise that as well. She has been unwilling to answer questions about the party's own financial culture. She has accepted it is the wealthiest political party in this country. It accepted a €4 million donation from the estate of Englishman William Hampton into the party's accounts in the North of Ireland, when it was bequeathed to Sinn Féin in the Republic of Ireland. This donation was more than 1,600 times the maximum allowable donation under Irish electoral law. That was a shady enough transaction to make even a stockbroker blush. These are issues that the Deputy needs to deal with too when we are talking about wider financial probity and accountability. Seanad Éireann has spoken in that regard.

With regard to further actions in terms of Davy, it is open to the Office of the Director of Corporate Enforcement, ODCE, to become involved here and also, potentially, other bodies as well. I do not want to prejudice further developments in regard to either the individuals concerned or this issue in terms of any further investigations that might or might not take place. Obviously, that is a matter in the first instance for the Office of the Director of Corporate Enforcement. We are committed, in the programme for Government, to the introduction of a senior executive accountability regime. Over the last decade alone, there have been 100 pieces of legislation and regulation introduced to underpin and strengthen the regulatory framework insofar as it pertains to financial regulation. The culture has been one of unacceptable greed, manifested in this deed, which I strongly deplore.

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