Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

I thank the Deputies for their contributions and for their constructive engagement with this legislation. It is the intention of the Minister, Deputy Donohoe, to have this Bill examined by the Select Committee on Finance, Public Expenditure and Reform, and Taoiseach in the coming weeks, where he looks forward to a more detailed consideration of the provisions of this Bill, and will engage with Deputies on any proposed amendments.

In the meantime, the Department officials and the Minister will reflect on the points raised and will give further consideration, in consultation with the Central Bank and the Office of the Attorney General, to any amendments that may be necessary to ensure that the objectives of the Bill are achieved as fully as possible.

This is an important Bill which aims to provide for greater levels of accountability in the financial services sector. It clarifies the standards of behaviour expected of individuals and firms in the sector and it should help raise the standards in practice. The most significant measures in the Bill are designed to improve individual behaviour and the overall culture in the financial sector, including the individual entities. Special standards of behaviour in financial institutions should achieve better outcomes for customers and an improved culture in the running and management of financial service firms offers significant benefits in preventing improper behaviour by individuals and organisations. The Bill also facilitates the Central Bank’s use of its supervisory tools to ensure that firms are well-run and, where necessary, deal appropriately with individuals who contravene the financial services law.

The one thing that has been very clear from this debate so far, which I am very pleased with, is that there is general agreement that this Bill should be passed and, in fact, the general theme from many people is to ask why it has taken so long. In that spirit, it is important that we get the Bill moved to Committee Stage for detailed assessment on a section-by-section basis. Many people fully support the Bill. In the past other Members had other Bills also on this issue. From listening to Members today, there is a need for this Bill, they generally support it, and I accept and know that they will come forward with amendments on Committee and Report Stages.

Another point which came through the debate is that there was extensive criticism of what happened during the bank crash, how customers were treated, how banks were arrogant, of the mistakes made, the lack of supervision, and how the culture was wrong. That was a very extensive theme raised by many people. I understand and agree with all of that, and that did happen. The point they were making, without saying it, is that they implied that there was an absolute need for this type of legislation which we did not have on that occasion. If we had this legislation in place then, perhaps those issues would not have happened. The point these Members were making is that this did happen in the past. There was egregious behaviour by many banks and unfair treatment which has been listed by different Deputies here in the debate. All of this goes to show and prove the absolute necessity of having this legislation published, enacted and approved by the Oireachtas as soon as possible.

I take on board all of the criticisms of past behaviours. I make no apologies and on many occasions I criticised many of the activities of the banks and financial institutions over the years. That has completely made this Government and the Minister, Deputy Donohoe, determined to pursue this legislation and have it enacted to prevent those types of issues happening again.

The focus on the senior executive accountability regime, SEAR, is on preventing this behaviour or mismanagement by senior management. The institution did not make all of these mistakes in the past, it was individuals and a culture which operated at senior level. It is important that we have measures in place to ensure that there is individual accountability. This is what the people of Ireland would and do want and that has been said here today.

There were no sanctions because there was no regime in place at the time. The essence of that is in this legislation to ensure that people will be held accountable for their actions and it is not just some corporate body which makes all of these decisions.

In response to the point made by the Deputies Tóibín, Doherty and Conway-Walsh as to why it has taken so long, this is a very complex piece of legislation and it has taken that time to get to where we are today. It is important to remember that we are giving very significant additional powers to the Central Bank and it is vital that the correct balance be struck between these powers and the protection of individuals' constitutional rights.

It is also imperative that any new provisions can withstand legal challenge, and for this reason very careful consideration had to be given to these proposals. This has involved lengthy engagement with the Attorney General’s office and the Central Bank to ensure that the legislation is both effective and constitutionally sound. We could have rushed it but we know that it might be subject to challenge. It is important that all of that effort is put in at this stage in advance of the legislation being enacted.

Due to the fact that the legislation will significantly expand the number of persons subject to enforcement actions by the Central Bank, and potential sanction, the Attorney General’s office was clear that we ensure that the provisions before the House should include adequate checks and safeguards so that sanctions would be proportionate.

It is also important to ensure that the safeguards intended to protect the rights of more junior persons would not negatively impact on the Central Bank’s enforcement processes in respect of more senior persons in the firms. Over the course of the legislation, various safeguards, checks and balances had to be put in place and I believe that the effort that has been put in will prove effective.

Deputies will be aware and there was a long discussion on tracker mortgages. Several Deputies raised what happened over that episode and I would point out that the enforcement actions taken to date demonstrate the effectiveness of the Central Bank’s existing powers. People mentioned the fines and the amounts that had to be repaid were in the order of €1 billion. It is important that the Central Bank has the authority, the mandate and the constitutional legislation to enable it to do its job.

Deputy Shortall mentioned the issue of constitutionality and I believe that I have covered that particular issue in my remarks a few moments ago.

Deputies Doherty and Ryan referred to the Private Members' Bill proposed in 2018 by Deputy Doherty. The Government did not oppose that Bill at that time. It agreed with the high-level objectives in that Bill but noted at the time that there were serious concerns with the details and with the way in which the Bill was drafted. The primary legal difficulty was that it sought to impose new criminal liability without being clear as to the scope of the new offences, in accordance with the principles of legal certainty in criminal matters. The broad principles of that Bill are addressed in these proposals and the Government Bill is far broader than the proposals in the original Private Members' Bill, notwithstanding the fact that the high-level objectives in that earlier Bill were very significant at that time.

Perhaps the passage of time and the detailed discussion with the Attorney General has improved the legislation to where we are today.

Deputy Mairéad Farrell mentioned the role of the senior executive accountability regime, SEAR. It will be rolled out on a phased basis and the Central Bank will issue the regulations on a phased basis as time goes on and we must give it the statutory power to do that. There is significant regulation in most of the shadow banking system within the EU. Within Ireland, resident money market funds, investment funds and finance companies are regulated entities. It is also worth noting that all regulated firms, whether included in the scope of SEAR at the outset or not, will be subject to business standards and individuals working in those firms will be subject to the common conduct standard and additional conduct standards. That is a matter that the Central Bank, as the regulator, will be implementing. People have asked why we did not give more detail in regard to those particular matters. The reason is that this House is not the regulator; the Central Bank is the regulator. We are passing the framework and the legislation within which it will operate, but they are the people who have been entrusted with the legislation heretofore to ensure the regulatory function is carried out. It is a function of the Central Bank to issue those various regulations on a phased basis over time.

Deputy McGuinness mentioned the issue of tied agents. We cannot legislate in a way that would retrospectively impose sanctions and penalties. A lot of the debate was about what happened in the past but people know we cannot retrospectively have legislation to deal with that. People highlighted what happened in the past and said it should not happen again. That is why we are here in the House today. Of particular relevance in a case of tied agents are the standards for businesses. While much of the emphasis of the Bill is on holding individuals accountable, it is recognised that businesses, as corporate entities, should also be held to high standards of conduct.

The Minister, Deputy Donohoe, looks forward to the opportunity to deal with the issues that have been referred to today and other matters that will inevitably come up on Committee Stage. We want to ensure that this legislation, with which everybody agrees in principle, should be passed as urgently as possible. I look forward to the co-operation of the Houses of the Oireachtas in ensuring the timely passage of this Bill.

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