Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I move amendment No. 1:

In page 25, line 7, to delete "it," and substitute "it".

I am tabling four amendments to the Bill to address minor typographical issues that have come to light since Committee Stage. I commend these four amendments to the House.

I am pleased to be able to bring this important Bill before the House today. Passage of the Bill by Dáil Éireann will be a significant milestone in our efforts to introduce greater accountability in the financial services industry.

My predecessor, the Minister for Public Expenditure and Reform, Deputy Donohoe, brought forward a number of amendments to the Bill on Committee Stage. These addressed the concerns of the European Central Bank to ensure there is clarity as to its exclusive prerogative in the supervision of significant supervised banking entities and made other improvements in how the Bill will operate, but did not represent any substantive change in the policy objectives of the Bill, which have been settled for some time. Those policy objectives, I am pleased to note, enjoy strong support from all parts of the House and I commend and thank colleagues for that co-operation. I acknowledge the constructive approach of all Members who have engaged with the process of bringing this Bill through the legislative process, in particular, the Chair and members of the Select Committee on Finance, Public Expenditure and Reform, and Taoiseach.

This Bill is the latest step in enhancing the Central Bank's regulatory powers. The transformation of culture in financial services organisations has been a key focus of financial regulators internationally in recent years and this Bill will place the Central Bank of Ireland among the most forward looking of these regulators.

This legislation will make individuals in financial services firms more responsive and responsible through driving individual accountability in decision-making at all levels, in particular at senior levels, in financial institutions. The repeated and very serious failures that we have seen in the leadership of financial institutions in the past are a constant reminder of how necessary it is to ensure that we have a system of regulation that is proportional, risk based and, most important, effective.

Like everyone in this House, I want to see a financial services sector that prioritises customers and in which honest, ethical and professional behaviour is second nature to everyone working in the industry. This Bill will play a key role in ensuring that this is the kind of financial services industry we have in Ireland, one that meets the needs of customers, stakeholders and the wider economy.

The Central Bank (Individual Accountability Framework) Bill 2022 will introduce the individual accountability framework which comprises the senior executive accountability regime, conduct standards for firms and individuals performing controlled functions, and the duty of responsibility. By ensuring that there is clarity as to who is responsible for what and that every key part of a firm's business has someone responsible for it, the senior executive accountability regime will ensure that, in the event that there is wrongdoing in a firm which the Central Bank needs to investigate, the investigation can be more focused and effective. By providing for conduct standards setting out standards of behaviour for regulated financial services providers and individuals performing functions in relation to them and by providing for the sanctioning of individuals who breach their responsibilities, the Bill proclaims clearly the standards of behaviour expected of those working in the financial services industry.

Many of those working in the industry are in positions of significant trust and responsibility, positions where wrongdoing can have serious consequences for customers and others, and it is right and proper that people in such roles should be expected to act with honesty and integrity, due skill, care and diligence, co-operate with the regulator, treat customers fairly and comply with standards of market conduct.

The Bill will also introduce enhancements to the Central Bank's existing supervisory and enforcement frameworks. There will be changes to the administrative sanctions procedure under Part IIIC of the Central Bank Act 1942 and the fitness and probity regime under Part 3 of the Central Bank Reform Act 2010. The fitness and probity regime will also be extended to cover various categories of financial holding companies.

To facilitate the holding of individual's accountable for the actions the Bill will also break the existing participation link so that individuals can be held accountable for their own actions, whether or not this involved a firm's wrongdoing in which they participated. The Bill has also provided a timely opportunity to ensure the Central Bank's enforcement processes meet the standards of fairness and transparency required by the Constitution, as interpreted by the Supreme Court in the decision in the case of Zalewski v. Adjudication Officer and others. In addition to ensuring these processes conform to the required standards of fairness in the administration of justice, the Bill also provides for enhanced oversight by the High Court and includes other appropriate safeguards to ensure that the constitutional rights of all concerned are adequately protected and that the Bill will be able to withstand any legal challenge. Much of the detail of the individual accountability framework, including the initial scope of the senior executive accountability regime, SEAR, will be included in regulations to be made by the Central Bank.

After the Bill is enacted, the Central Bank intends to conduct a comprehensive consultation exercise. This will present an important opportunity for all industry participants to engage with the bank on the detail of how the new regime will operate. I strongly encourage everyone concerned to engage constructively with this consultation process.

Once again, I thank Deputies for their support for the important objectives of this legislation and commend the Bill to the House.

On the four amendments, I propose to discuss amendments Nos. 1 to 4, inclusive, together as they are all very minor and technical in nature. These are technical amendments to ensure the proper operations of the provisions of the Bill, the requirement for which arose as a result of further examination of the Bill, as amended by the Select Committee on Finance, Public Expenditure and Reform, and Taoiseach.

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