Dáil debates

Wednesday, 19 October 2022

Central Bank (Individual Accountability Framework) Bill 2022: Second Stage (Resumed)

 

4:17 pm

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
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Ba mhaith liom fosta céad míle fáilte a chur roimh Uachtarán na Portaingéile agus an fhoireann iomlán atá in éindí leis. Tá míle fáilte rompu agus tá súil agam go mbainfidh siad sult as an turas.

I welcome the opportunity to speak on this legislation. Many have waited a long time for the introduction of this legislation, too long a time. All customers, whatever the company, product or service concerned, have the right to be treated fairly and have their interests upheld. At the very least, they should be safe in the knowledge that they will be protected from gross misconduct, unethical behaviour and corporate mismanagement. For far too long, customers of banking and financial services have not been afforded that protection and have not confidence that when they are the victims of misconduct or mismanagement at the top of our banking and finance sector that those responsible will be held to account.

More than a decade since the Irish banking sector plunged our economy into crisis, it is shocking that we are only today debating legislation that would allow senior bank and financial services executives to be held to account for their failures. The financial crisis revealed a culture at the heart of our banking sector that prized corporate greed at the expense of good governance and consumer welfare. Unfortunately, that culture was allowed to fester when Irish citizens were paying the price. The deep mistrust felt towards the sector finds its origins in the financial crash of 2008, but this by no means is the only reason or explanation for the public mistrust of the banking sector.

As a result of the tracker mortgage scandal, banks have been fined more than €270 million, with €680 million paid out to more than 40,000 customers in compensation. This scandal saw banks move customers onto more expensive interest rates, depriving them of the benefits of the cheaper interest rates they were entitled to. These headline figures fail to convey the harm and devastation that the banks visited on citizens and families. The banks' actions led to the loss of 327 family homes. As well as the financial harm inflicted on families, the impact of the banks' actions on the mental health of customers will never be quantified. As the Central Bank of Ireland has noted, when the examination began in 2015, some lenders initially attempted to minimise the number of affected customers to whom they would have to pay redress and compensation.

The fines imposed by the Central Bank on retail banks highlight a litany of failures that should bring shame to those responsible. The enforcement actions published by the regulator spoke of the unacceptable and avoidable harm caused to their customers by the devastating impact of the banks' failures. Shockingly, the Central Bank found that banks, including the Bank of Ireland, KBC, Ulster Bank and AIB, continued to mete out harm to their customers even during the tracker mortgage examination. Failing to comply with the stop-the-harm principles of the examination, they adopted a culture of continuing to harm, with family homes being lost even during that time.

The Central Bank described in shocking detail the unacceptable harm Permanent TSB caused to its tracker mortgage customers, from extended periods of significant overcharging to the loss of 12 family homes; the impact of KBC's failings on its customers, which was devastating and included significant overcharging and the loss of 66 properties; how Ulster Bank caused unacceptable and avoidable harm to its impacted tracker mortgage customers from extended periods of significant overcharging to the loss of 43 properties, 29 of which were family homes; how Bank of Ireland, when faced with a choice, prioritised its own interests with little or no regard given to the impact on its customers, resulting in a significant and, at times, devastating impact on nearly 16,000 customers and leading to the loss of 25 family homes; and with respect to AIB, a litany of failings resulted in significant financial strain and distress for those affected and their families and the loss of 13 family homes.

It is important to read these devastating findings into the Official Report. As I said, however, these fail to convey the financial, emotional and mental devastation that these actions caused to those affected. It should be a cause of astonishment and deep anger that banks were found to have breached regulations even as recently as this year. Despite the devastation visited upon borrowers and families as a result of this scandal and the behaviour of the banks, not one individual has been held to account. That is truly shameful. The Public Trust in Banking Survey 2022, published by the Irish Banking Culture Board, IBCB, found that only 22% of people believe Irish banks have leadership teams that act with integrity, particularly when things go wrong, with general trust in the banking sector remaining low. This lack of trust is not a general feeling that banks prioritise themselves above the needs of their customers, but a demonstrable fact that has been established by each enforcement action published by the Central Bank in recent years.

Public mistrust in the banks is driven by real examples, by real lives and by real harm caused by real actions. It is clear is this public mistrust is well founded. This mistrust, together with banking failures - the tracker mortgage scandal, for example - demands an outcome-driven response. For too long, a rotten culture has been allowed to fester at the heart of the banking sector. Bad behaviour has been unaccountable.

In July 2018, the Central Bank published its report, Behaviour and Culture of the Irish Retail Banks, on foot of the tracker mortgage scandal. Its recommendations included a call for legislation to introduce a new financial accountability framework including new conduct standards, a senior executive regime, enhancements to the fitness and probity regime and an enforcement process. The recommendations sought to ensure that senior bankers would be held to account for their actions. They were not radical or novel proposals.

In January 2017, Sinn Féin brought a motion to the Dáil calling for legislation to ensure that individuals in financial institutions would be held to account. A senior accountability regime was introduced in Britain in 2016 and in Australia in 2017. It is disappointing that it has taken nearly six years since we brought the motion to the Dáil, and over four years since the Central Bank made its recommendations, for this legislation to be brought before this House. This delay reflects what I believe has been the lack of priority and urgency attached to the issue by this and previous Governments.

The Central Bank (Individual Accountability Framework) Bill aims to finally bring individual accountability to bear on the financial services industry. Its enactment would be followed by the Central Bank issuing draft regulations and guidelines for public consultation and it would grant the Central Bank the powers to implement a new individual accountability framework for senior executives and regulated financial service providers.

There are four key pillars to the individual accountability framework. First, there will be a new senior executive accountability regime. This will involve the regulator setting out details of inherent and allocated responsibilities and requirements, including statements of responsibility and management responsibility maps. Senior executives with pre-approval control functions, such as executives and non-executive directors, chairpersons of the board and key committees, heads of finance and heads of audit, will now be subject to the new regime. However, the definition of senior executive function is not given in the Bill but will, instead, be given in the Central Bank regulations that will follow its enactment. Similarly, the Bill does not detail the sectors that would be included under the regime, with these, too, to be set out in the Central Bank regulations.

Second, there will be new conduct standards for firms, their management and staff. These will include new business standards, such as requiring firms to act in the best interests of consumers and not mislead their customers. It will also include common and additional conduct standards that will apply to performing control functions, such as requiring individuals to act honestly and with integrity.

Third, there will be enhancements to the fitness and probity regime. For example, a new certification requirement will be introduced similar to that already in place in Britain. An important provision of the Bill is that it extends the scope of investigations to include individuals in a control function position in holding companies and allows the Central Bank to undertake an investigation with respect to the fitness and probity of any person who performed a control function up to six years prior to the investigation. At present, the regulator can only investigate individuals who are in the position at the time when the investigation begins.

Fourth, the Bill strengthens the enforcement capabilities of the Central Bank. A crucial part of this is breaking the participation link. This means that the Central Bank will no longer be required to prove breaches against a firm before it can pursue sanctions or hold individuals to account who held positions within that firm. That is a crucial provision. The Bill further includes provisions giving the High Court oversight of the settlement process under the administration sanction procedures and requiring it to confirm sanctions imposed by the Central Bank.

I welcome the provisions of the Bill. They are long overdue but, plainly, the Dáil, the regulator and the public have waited far too long for legislation that will finally enable the regulator to hold senior bankers to account. Citizens who have been subject to untold and significant harm at the hands of the banking industry have had to suffer while those responsible have gone unnamed and unpunished and that should never have been the case.

It is long overdue that accountability and individual responsibility are being put at the centre of how banks and financial firms operate so that consumer welfare is a priority rather than an afterthought with devastating consequences. I welcome the provisions of this legislation, while noting that many details of the scope and application will be set out in regulations to be published by the Central Bank. It is crucial that what we have on paper is enforceable in practice. Sinn Féin looks forward to scrutinising these elements of the Bill on Committee Stage.

4:27 pm

Photo of Rose Conway-WalshRose Conway-Walsh (Mayo, Sinn Fein)
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This legislation aims to improve the accountability - perhaps I should say it will "introduce" accountability - of senior executives in the banking, insurance and wider financial sector and should ultimately protect customers and even the wider economy, which can suffer when the financial sector is left unregulated. This legislation, as has been said, is sorely needed and well overdue.

An individual accountability regime was introduced in Britain in 2016 in the form of the senior managers and certification regime and in Australia in 2017 with the introduction of the banking executive accountability regime. In 2017, Sinn Féin brought forward a motion to the Dáil calling for legislation that would ensure individuals in financial institutions could be held to account. The proposal that provides the basis of this legislation came from the Central Bank four years ago.

All of these reforms were really put in motion by the experience of the global financial crisis. The financial crash in 2008 utterly destroyed public confidence in the financial sector. Indeed, it utterly destroyed this country and we are still paying the price for it in much of what we talk about today in education, health and elsewhere. The staggering lack of accountability of the financial and banking sector was laid bare and trust has not been restored to date.

By comparison, days after the collapse the Icelandic authorities designed a comprehensive policy of accountability based on two overlapping objectives - establishing the truth and punishing those responsible. An independent truth commission was mandated to document the causes of the meltdown and an office of the special prosecutor was established and tasked with thoroughly investigating and prosecuting those who were responsible for any crimes committed. The special prosecutor's office successfully prosecuted 40 bank executives. That is the standard we should be aiming for.

Fundamentally, it should be a question of trust. There should be sufficient Government safeguards and people should be held to account for their actions. The most effective way to manage bad behaviour and reduce bad outcomes is to have real accountability.

The senior executive accountability regime has the potential to delivery greater levels of accountability but much work needs to be done in terms of the detail. It will provide a duty of responsibility. I would be interested to know why the language proposed by the Central Bank, to the effect that executives must take all reasonable steps, has been changed to provide that they must take all steps that are "reasonable in the circumstances". I hope this does not represent an attempt to water down this legislation.

I welcome the management responsibility maps as a mechanism to ensure that senior managers understand what is expected of them and that there are no overlaps or, more importantly, underlaps in who is responsible for what.

The legislation will also introduce a conduct of standards. As the Minister of State said yesterday, the conduct standards are "unremarkable" and "outline the expectations of financial sector executives to act with honesty and integrity, due skill, care and diligence [and] to co-operate with the regulator". However, these are basic standards that have too often not been adhered to. This was all too obvious in the pain and stress suffered by individuals and families during the tracker mortgage scandal. In many cases, the overcharging ran into tens of thousands of euro. In the worst cases, people lost their homes as a direct result of the bank action. The Minister, Deputy Donohoe, will remember that when I was a member of the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach, some of the people who were impacted by the tracker mortgage scandal came before the committee. It was devastating to see the way their lives had been destroyed. That is reflected somewhat in the €680 million compensation and the €270 million in fines, but there were 327 homes lost. The time that was lost by families who suffered and the quality of life that was impacted was devastating across this State. In many cases, the overcharging ran into tens of thousands of euro. In the worst case scenarios, as I said, people lost their homes. It is often blamed on the toxic culture in the banks and financial services sector. I note there is somebody else here to contribute.

I welcome this Bill. I hope it will do what it is intended to do.

4:37 pm

Photo of Mairead FarrellMairead Farrell (Galway West, Sinn Fein)
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When speaking about regulations such as these it is hard not to think about the financial crash. I did my leaving certificate in 2008 and went on to study finance. It was ever present in all I studied at the time. An acronym that was referenced a lot was "IBGYBG", which stood for "I'll be gone. You'll be gone". I will have got my commission and the person I sold to will have sold on and neither of us will be held accountable when something goes wrong. After studying finance I worked in banking and derivatives. This was always in the background. When we began looking at these particular proposals, it came to mind again.

The introduction of a new financial regulation with an emphasis on individual and personal accountability and responsibility is very welcome. We cannot have a situation where financial professionals who have engaged in wrongdoing and failed in their fiduciary duties can hide behind a corporate veil. We recognise that we live in an era of financialisation when financial markets and institutions are gaining greater influence. We now have banks that are seen as being too big to fail. In advanced countries the banking sector has become concentrated. This provides it with significant power. Our banking sector concentration is high even by international standards. With great power there needs to be great accountability. The Minister's new framework will introduce new conduct standards. It will enhance the existing fitness and probity regime. It will lay out the individual responsibilities of each senior executive and strengthen the Central Bank's administrative sanctions procedures. This will mean that individuals can be pursued directly for their misconduct as opposed to general participation of a firm's wrongdoing. I welcome these changes.

I have a query and the Minister can correct me if I am wrong, which I am sure he would. From what I can see the Bill only applies to certain customer-facing firms. This would mean those non-bank firms engaged in bank-like activities, that is, shadow banks, would not be included. Let us consider the size of the shadow banking sector compared to our domestic banking sector. In 2021, the sum total of the assets of AIB, Bank of Ireland, KBC, Ulster Bank and Permanent TSB was €343 billion while the size of the shadow banking sector is estimated to be in the trillions of euro. It has approximately €4.6 trillion worth of assets under administration here. Directors of these firms will not be held to the same standard. I worry this is a major weakness in the Bill.

We know from the financial crash that many large banks used shadow banks for a variety of reasons. They are not mutually exclusive. There can be the creation of grey areas where regulatory arbitrage might occur and enforcement issues could arise. If we take a securitisation transaction, when a bank makes a sale of a portfolio of non-performing mortgage assets to a special purpose vehicle, SPV, if there is a lack of clarity on the legal ownership of the collateral in this situation, the legal title to the security is splintered into many hands. This makes enforcement difficult. I would like the Minister to address this in his response.

I am concerned that a similar problematic enforcement situation could occur with the senior executive accountability regime. Senior executives of banks will be under the regime but the directors of a connected SPV will not. If some wrongdoing were to happen that was part of a complex chain of transactions involving various SPVs, and that wrongdoing occurred at the level of a vehicle, would the senior executive at the bank be able to credibly say it was nothing to do with the bank and to take it up with directors of the nominally independent firm? Those directors would not be under the senior executive accountability regime. This is an issue. I have more points but I am running out of time and this is the particular issue I would like the Minister to address his closing remarks.

Photo of Gerald NashGerald Nash (Louth, Labour)
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This is a good but long overdue day. Several years after the Central Bank recommended that our laws be amended to make individual decision-makers and financial institutions responsible for their actions, we finally have a Bill before us to make it a reality. The recent history of banking in this country has been well documented. There was an absence of strong regulation and too close a relationship between bankers and regulators, all egged on by Governments in the 2000 that were satisfied to leave them at it for as long as the stamp duty kept rolling in and mortgage loans were approved. Our society is still damaged by the effects of the financial crash. The victims of the crash and the policies that allowed the collapse to occur are to be found in the lines of those queueing to rent a home they will not get or to view a home they cannot afford. There is a direct line to be drawn between the behaviour of the banks in the early 2000s and the hands-off regulation at the time and the housing crisis we are now experiencing.

Since 2010, the banking regulatory environment has changed dramatically. Serious restrictions are now placed on banks with regard to their capital requirements. Stress testing of potential homeowners in mortgage applications is rigorous. We know that changes have been proposed by the Central Bank. We have a strengthened Central Bank with teeth and a good and functioning Financial Services and Pensions Ombudsman. We have a new banking culture board that aims to drive culture change across the retail banks. These are all welcome developments that will make a major difference to the way in which the retail banking sector operates in this country. It will be better regulated, more customer focused and more transparent but far from perfect.

One piece has always been missing. While this is a good day, the question that must be asked is why we had to wait so long for an individual accountability regime to be established. Earlier I mentioned how our dysfunctional housing system owes much to the continuing playing out of the socioeconomic impact of the financial crash and the collapse of the public finances. It is important to understand that the tracker mortgage scandal of epic proportions, which deprived people of their homes, cost them relationships and cost lives, can be traced back to a culture of impunity at corporate and individual level in all the major retail banks.

Less than one month ago, the Central Bank issued a fine of more than €100 million for a series of significant and long-running failings with regard to 16,000 tracker mortgage customers between 2004 and 2022 in respect of Bank of Ireland. These failings involve the loss of 25 family homes. The Central Bank said this could have been avoided if Bank of Ireland had met its most basic and fundamental obligations. Bank of Ireland is not alone. Mention must also be made of AIB, Permanent TSB, KBC and Ulster Bank. They were all at it. No major bank escapes our gaze on this.

The Central Bank report of 2018 pointed to the fact the tracker mortgage examination noted the cultural failings when it came to the tracker mortgage scandal, along with poor systems, weak internal controls and poor governance. All of these when taken together caused devastating impacts on consumers. We need to reflect on this. We must remember that at the most basic level it is human beings who make decisions, individually and collectively. People make decisions and not just firms. One of the biggest stains on our society is that a single individual has yet to be held to account for the horror the banks perpetrated against thousands of tracker mortgage customers who, when we strip it all down, had money stolen from them in a calculated and deliberate way. This is what the tracker mortgage scandal amounts to.

It is worth reminding the House that to date there has been only one inquiry into the involvement of an individual in the tracker mortgage saga. I understand the person worked for PTSB and the investigation is ongoing. If ever proof were needed of the demand for a functioning fit-for-purpose set of laws and regulations to make individuals accountable for their decisions, it is the very existence of only one investigation regarding tracker mortgages.

We should not be surprised that the level of trust in Irish banking is low. This has been referenced by previous speakers. The chair of the Irish Banking Culture Board, Mr. Justice Hedigan, said when the board published its Éist survey this year that more work needs to be done to address the deeply ingrained feelings of distrust towards the banking sector among the public. Mr. Justice Hedigan went on to remark that continued positive behaviour on behalf of the retail banks is necessary to further restore public trust in the sector. He said this in good faith. It was a week before AIB tried to railroad through a plan to slash its branch network without consultation and with no thought for those who would be most impacted. This was followed by a hasty retreat after a series of significant political interventions. I hope AIB has learned some valuable lessons in this regard. This is not how to win back trust; in fact, it is quite the opposite.

These proposals, which will be exceptionally important in rebuilding that trust, are overdue and it is a pity we had to wait so long for the establishment of a system of individual accountability, the kind of system that has been operating well in the UK and Australia for some years. It is encouraging that reviews of the UK and Australian systems have reported positive impacts on culture and governance and, significantly, that no challenges were experienced in attracting skilled and experienced staff to the financial services sector as a result of the robust accountability regime introduced in those jurisdictions. This is important from the point of view of the financial services sector here, a sector which is becoming increasingly important for the economy and the provision of good jobs throughout the country.

People who work in the financial sector ought not to fear anything from improved regulation and enhanced accountability; in fact, it should be embraced. This new regime should and can be worn as a badge of honour for Ireland and could be seen as another important step towards better governance and compliance with international best practice.

Both the Minister and the Minister of State, Deputy Fleming, have highlighted in some detail many of the key elements of the Bill. The Labour Party supports the Bill and will propose appropriate amendments on Committee and Report Stages. It has been through the regulatory impact assessment process, which has summarised the purpose of the Bill in a succinct way. It states that the intention of the legislation is to act as a driver for the recognition of responsibilities by individuals to mitigate the risk of misconduct by firms and deliver better outcomes for consumers and protected markets. It will introduce conduct standards for controlled function roles in all firms and clarify the lines of responsibility and decision-making processes within relevant firms. It will build on the Central Bank's existing powers and enhance the bank's ability to hold senior executives and other individuals to account. It will bring efficiencies to the supervisory and enforcement work of the Central Bank by enforcing greater transparency in respect of who is responsible for what and how roles and responsibilities work together and interconnect.

The Bill will introduce a new regime of responsibility, governance and sanctions for senior executives who are managing and operating regulated financial service providers, RFSPs, by means of a senior executive accountability regime, SEAR. It will set out codes of conduct for both businesses and individuals, thereby making clear the standards of allowed behaviour, as well as sanctions that would be faced if responsibilities are breached. It will introduce a new duty of responsibility obliging senior executives to take reasonable steps to ensure the firm does not breach its obligations under financial services legislation. It will also revise the processes of the Central Bank to make them more effective and efficient, and to ensure they conform to standards of fairness in the administration of justice. These include the fitness and probity regime and the administrative sanctions procedures, which the Minister provided detail on earlier.

The Bill is detailed and technical in places and I do not intend to give views on every aspect of it. In any case, it seems the efficacy of this legislation will very much depend on the way in which the regulator, the enforcement authority and the Central Bank produce and enforce regulations and how they work with individuals and financial institutions that fall within the scope of the legislation.

Turning to individual accountability, the Bill sets out a clear legal framework on where individual decision-making and responsibility lie. The new laws will place an onus on the RFSPs to assign clear functions and responsibilities to pre-approval controlled functions, PCFs, which is welcome and provides transparency.

Chapter 2 sets out the business standards that must be adhered to, including the legal requirement to act honestly and professionally and to engage in good faith with the regulator. There is also a clear obligation to disclose to the Central Bank any matter relating to the RFSP for which the bank could reasonably expect to receive notice of, and this is a good thing.

Chapter 3 covers duties of responsibility and the new standards of conduct. It is important that the precise parameters of the duty of responsibility are described in the Bill as well as what constitutes inherent and allocated responsibilities.

Throughout the legislation, we will see reference to the need to show the regulator, through the taking of reasonable steps at all times, how an individual or organisation remains compliant with the standards of conduct and behaviour that will be demanded of those who come under the scope of the new legislation. This requirement makes sure that this onerous legislation is balanced and proportionate and will allow the regulators to fully consider the context of any breach that may come to their attention for investigation and, if a contravention occurs, to impose a sanction.

Sections 53E and 53F describe in detail the common conduct standards and additional conduct standards. Section 53G is important in that it empowers the Central Bank to develop guidelines and guidance for those who will be governed by the legislation. It is imperative that an intensive programme of outreach and training be afforded to those who will come under the remit of the new laws. This is only fair and proper, which is recognised in the Bill and acknowledged by the Minister and Central Bank in their commentary on this new regime. This will help to drive compliance and limit the room for excuses. Ignorance will be no defence. The legislation cannot be clearer on what is demanded and required of those who are governed by it.

Part 4 is crucial. It relates to the changes that will be made to the Central Bank's administrative sanctions procedure under the new laws, including the process of investigating breaches and how they will be investigated and so on. It is important this process of investigation and sanctions for contraventions is robust, that it complies with the principles of natural justice and fair procedures, and that it is not at odds with the Constitution. The process has been carefully laid out, step by step, in the legislation and that is a good thing.

The Bill is at pains to reflect the lessons of the Zalewski judgement, as the Minister mentioned earlier. It is critically important when administrative tribunals and regulators undertake the important job of investigating breaches of laws and regulations, and where they pass down serious sanctions, that it is done in a fair and balanced way on the balance of probabilities. In this regard, I raise two points that we in the Labour Party see as important and is something to which we may return on Committee and Report Stages. The Bill has two features we believe are ripe for scrutiny. The first is the rule under section 23, which the Minister referred to earlier, that inquiry decisions do not take effect unless confirmed by the High Court. While he went some way to describe the meaning of "confirmed", we are left to work out what confirmed means in this context and, therefore, I would appreciate further elaboration on precisely what confirmed by the High Court means. What the procedure intends to achieve is quite unclear. It seems the High Court will have no option, if we take a literal view of this legislation, but to apply its confirmation rubber stamp unless it finds an error of law, which is both manifest on the face of the record and so fundamental as to deprive the decision of its basis. If the High Court cannot find such an egregious error of law, the decision of the inquiry and its sanctions must stand. This is what the section seems to insistent upon and it will require further interrogation. I do not see how the participation of the courts at this stage of the process, and to the limited extent as described in the Bill, can cloak it with any greater constitutional legitimacy than it would have without the involvement of the court.

The second provision is in section 67, which prohibits the High Court from granting a judicial review in respect of these decisions, and this requires further elaboration and explanation. The combined effect of these two provisions means we are being asked to legislate for a procedure where the Central Bank can get the law on legal procedures wrong but there would be no legal remedy or access to the courts unless the error can be held to be both manifest and fundamental. The question could be asked why we have such little faith in our regulators that we feel the need to legislate to allow them to get things wrong, even badly wrong, and we only draw the line at them getting things manifestly and fundamentally wrong. These two provisions require additional elaboration.

This is a good day for transparency. We finally have legislation before the Oireachtas that will require banking executives to be responsible for the decisions they make.

It is legislation that we support in principle. It is strong and robust legislation. I look forward to seeing the regulations the Central Bank will be empowered to make to ensure the Bill achieve its objectives. I look forward to engaging with the Minister in more detail on Committee and Report Stages on amendments to the Bill.

4:57 pm

Photo of Cathal CroweCathal Crowe (Clare, Fianna Fail)
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I am glad to see the Leas-Cheann Comhairle has arranged for the roof to be fixed.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I managed that.

Photo of Cathal CroweCathal Crowe (Clare, Fianna Fail)
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I was worried we might have to bail out to the convention centre, which was quite a miserable place to be stuck in. At least we are here for the time being.

I am glad to have the opportunity to speak on this Bill. It is a positive Bill and empowering to consumers and all who walk through the doors of a bank to avail of services. It provides for greater levels of accountability in the financial services sector. It sets out the standards and behaviour expectations of the financial sector for individuals and firms that operate within it and holds them to very high standards. This is good for consumers, transparency and doing business above board. There are also improved mechanisms for the Central Bank to have a supervisory role to uphold the high standards we expect of the sector.

I do not intend use all of my time but I will make a few points. Earlier this year, AIB announced it would go cashless, a decision it rolled back on. It was the right thing to do. It was anti-consumer and anti-rural. It was very insulting to a taxpaying public which bailed out the Irish banking sector in 2008. At the time, many Ministers in government explained that the Government cannot intervene in operational banking matters, but I hope that as legislation continues to evolve and be refined, we can have a mechanism whereby we can have a greater hold over the likes of AIB and other financial institutions to ensure we do not end up with another August 2022 announcement that a bank is going cashless. It caught the whole country by surprise. It caught AIB by surprise that there was such a backlash from the public, and rightly so. I hope that in time we can have mechanisms that bring more responsibility to the banking sector. It is not all about the ethics of banking, although that is important and is in the Bill. It is also about the onus on banks to provide, under licence from the Central Bank, a service at community level in the country.

On community banking, other models could be worth examining in due course, such as the Kiwi banks and Sparkasse banks in Germany, which operate very well. Too often, they are misunderstood as being akin to the Irish credit union model. They are not; they are quite different. They are very successful models that work very well at community level. A lot of money is reinvested at community level.

I and many other Members have a bugbear about the Criminal Justice (Money Laundering and Terrorist Financing) Act. Section 37 of the Act makes every person who serves in this House a politically exposed person. We have faced an electorate, regardless of which, if any, party we represent, and have a mandate, through the ballot paper and electoral process, to stand in this House but we have that Act hanging over our heads. I cannot reconcile that with any Member of this House, past, present or future, being subject to legislation that would define his or her as being in the same bracket as terrorists.

The genesis of this goes back to a different era in politics when business may not have been quite as clean. All it takes is a few individuals in any work environment to stain the reputation of many. There was corruption and people who abused office over many years, but the reality is that many politicians are politically exposed persons due to section 37 of the Act. If they, their spouse, partner, children or grandchildren want to avail of a very small and minor financial product, they cannot get it. I recently celebrated my 40th birthday and group of us went out to celebrate. As now happens in bars and restaurants, the bill came out and out came the Revolut cards. I was embarrassed to be the only one at the table who had no Revolut card because I have to go through hoops and loops and back over and beyond. It is impossible to get one. That is just one financial product; there are many others that are being denied to people.

I accept that the public lens in its full wrath is cast over us; that is part and parcel of the job. We should be scrutinised and held to a high ethical bar, but I do not think all of our family members and extended family should have a net of suspicion thrown over them. I do not think the Act can be reconciled with the positions we hold and our families who do not seek public life. The Act is not up for debate today. Maybe it is legislation born out of a requirement of ten years ago and perhaps it needs some refinement. I fully support the Bill before the House. It is good legislation and has my full support.

Photo of Patricia RyanPatricia Ryan (Kildare South, Sinn Fein)
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Progress in bringing this Bill forward has been slow. The updated version was published on 28 July 2022, a year and a day after the publication of the general scheme of the Bill. It comes four years after the publication of the Central Bank's report on the behaviour and culture of the Irish retail banks, which first set out the general outline of the new individual accountability framework.

While the details of the proposed framework have been refined since the publication of the report, its four main elements remain the same. They are conduct standards; fitness and probity reform; reform to simplify regulatory enforcement against individuals; and the senior executive accountability regime. The Bill aims to enhance individual accountability in the financial services industry. It grants the power to make regulations to the Central Bank to effectively implement the individual accountability framework in respect of senior executives in regulated financial service providers.

As the Minister knows, and as others have mentioned, Britain and Australia have introduced similar legislation in the past six years. It is to be hoped the introduction of such legislation here will give rise to improvements in internal governance and help to concentrate the minds of senior individuals on the standards of conduct expected of them.

In January 2017, Sinn Féin brought forward a motion in the Dáil calling for legislation that would ensure individual in financial institutions could be held to account. In July 2018, the Central Bank called for similar reforms to enhance its ability to promote what it described as a culture of ethical compliance by firms and individuals. It is regrettable that the legislation is being introduced four years after these reforms were called for. It is a long overdue Bill. As a result of the tracker mortgage scandal, thousands of families lost income and 327 people lost their homes. While banks have been fined a combined total of €278 million, not a single individual has ever been held to account. The Bill must ensure that this never happens again.

I welcome the senior executive accountability regime in the Bill which will make individual directors and managers of banks and financial services companies personally liable for regulatory breaches by their firms. We all saw the rogue behaviour that led to the near collapse of our banking system and the biggest transfer of State wealth to private hands in the history of the State. The Government, and previous Governments, know well how to transfer public money to private hands. We see this with direct provision, housing assistance payments and private bus operators. It is all around us. Little has been learned from the €64 billion bank bailout. The rich got richer and the poor got poorer. The same happened during the pandemic. We need change, greater redistribution of wealth and a republic where workers get a greater share of the profits they generate.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Social Democrats)
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I want to start by welcoming this long overdue Bill, which the Central Bank first called for in 2018. It is clear from recent history that the senior executive accountability framework is sorely needed, along with the enhanced Central Bank powers, so that the wrongdoings of the past are not repeated. Why has it taken over four years to progress this Bill? We have the very same Minister for Finance that we had when the Central Bank first called for this framework. The Minister is at pains to stress that the Bill has always been a priority, but if that is the case I wonder why it has taken four years to produce and publish it. Given the costs and misery caused by the banking crisis, it is hard to know why there was such a delay.

The delay has obviously been in producing the legislation but that, in turn, will delay the implementation of what is a much-needed new framework.

I accept that engagements with the Central Bank and other relevant stakeholders were needed to iron out the details of this new framework but this legislation is not exactly inventing the wheel. The UK has had very similar legislation in place for years along with other countries such as Australia and Singapore. It would have been preferable if we had debated this legislation a couple of years ago, but it is welcome nonetheless. I am pleased this reform is finally taking place because trust in Irish retail banks is on the floor, as I think most people would agree. It is understandable that it is so.

In July, a report on public trust in banking from the Irish Banking Culture Board found that almost 80% of people still do not trust bank bosses to act with integrity, especially when things go wrong. Although the board bizarrely tried to dress its findings up as a positive result for the sector, it is blatantly obvious that the banks have failed to build any social capital since the crash. That is no surprise in many ways, given the scale of destruction that domestic banks have caused in this country.

It is now 15 years since the then Fianna Fáil-Green Party coalition gave a blanket guarantee to cover nearly all the liabilities of the six main domestic financial institutions. With that decision, the Government walked blindly into unknown and rapidly escalating commitments that would amount to the Irish public bailing out the banks to the tune of more than €60 billion. While there were undoubtedly global influences on our banking crisis, the core characteristics of the problem were home-made. The root cause can be found in a domestic property bubble that was fuelled by an under-regulated banking sector that was over-reliant on property-related lending both at home and abroad.

Unfortunately, this catastrophe for the State and its citizens was not followed by the kind of root-and-branch reform which is still desperately needed. The interests of the financial sector continue to trump good governance. One can see this in the tracker mortgage scandal and the Davy bond scandal. The latter is the most recent scandal in Irish financial services and it drives home the need for individual accountability in the upper echelons of the sector. Is it any wonder the public does not trust these people when there seems to be a litany of impropriety and rogue personal gain at the heart of some financial institutions?

This is the type of conduct that must be rooted out and tackled. The repercussions must be felt by the individuals involved. Imposing fines on institutions that amount to little more than a slap on the wrist just does not cut it and does not change the culture. That is exactly why the Central Bank identified the need for the framework we are discussing here today.

In June 2018, the Central Bank published its report, Behaviour and Culture of the Irish Retail Banks, following a request from the Minister to examine significant cultural failings within Ireland's banking sector. It focused primarily on the behaviour of the executive leadership teams of the five main Irish retail banks: AIB, Bank of Ireland, Permanent TSB, Ulster Bank and KBC Bank. It also looked at the interplay of senior executives and internal stakeholders in the context of strategic decision-making.

Importantly there was also a clear focus on the key decision-makers in each firm and the tone they set from the top. One of the key recommendations from the Central Bank was on the need for legislation to introduce an enhanced individual accountability framework, which I am pleased to see forms a key part of the legislation before us. As the report outlines, every single member of an organisation should be clear as to what is expected of him or her and the consequences of deviating from such standards. This is especially pertinent when we are talking about senior executives among whom clearer accountability is undoubtedly needed.

Other aspects of the Bill are also very welcome, such as the duty of responsibility provision which would impose a legal obligation on senior executives to ensure their area of responsibility within the company is compliant with the law. Measures such as this, which underpin accountability and are in the interests of consumers, will always have the support of my party and, I am sure, all parties in this House. However, it will take much more than this legislation to restore trust in the banking sector. While the arguments in favour of these changes are undeniably true, perceptions will not change until customers can see positive changes on the ground. Unfortunately there is no sign of that in our towns and cities. The only changes we see are regressive ones.

While we must ensure the era of light-touch regulation is behind us and there is never a repeat of the kind of circumstances and the culture associated with the period up to 2008, we must also ensure the remaining banks that now enjoy a powerful monopoly are not allowed to cut services to the bone. Cultural and behavioural changes in the sector, without a commitment to reinstating services, will not put a stop to the erosion of trust that is evident in survey after survey.

In the 2022 trust survey, the highest-scoring attribute of banks was high-quality and competent staff. It is clear that staff in branches are very much valued locally and are key drivers of trust, as they understand their customers and their communities. The rush to adopt digital services has underestimated that vital human element. There is no doubt that online services will continue to grow in popularity but when people need advice or find themselves in financial difficulties, most will still want to speak with a trusted staff member in their local branch. That is something that retail banks have yet to fully grasp. I hope that the outcry in respect of AIB's botched decision to remove cash services from 70 branches was a wake-up call for the sector.

I will take this opportunity to make the case once again for a public banking model. The Social Democrats have been calling for this since 2016 and with trust in retail banks shattered and the exodus of providers from the market, the case for a public model has never been more compelling. We know that people have lost faith in private banking institutions and they are seeking alternatives to the pillar banks. The creation of a publicly owned community banking system, as operates successfully in many other European countries, would give people an option to manage their finances in a way that is not entirely about making profits for banks. Instead, they could bank with an institution with a social conscience and with a primary remit of ensuring local banking facilities and services are available to local people.

The Social Democrats have long proposed an ambitious project whereby the State and the Central Bank would work with credit unions and post offices to build a strong community banking sector. Not only would this create much-needed competition in the banking sector, but it would also support financial inclusion. It is very disappointing, but not surprising, that successive Governments have chosen not to proceed with such a model. We have heard much about banking culture during this debate but unless we become culture makers, we will continue to be culture takers who put up with people being treated badly by the banks that we bailed out.

During the current cost-of-living crisis, improving access to local finance through publicly owned institutions that can be trusted, would be a considerable value to customers and, indeed, to small businesses.

Otherwise, many vulnerable customers will continue to rely on high-cost and often shady sources of credit. The pillar banks have shown themselves not to be especially interested in low-income customers and have made it difficult to have any interface with staff in the bank. It is important, therefore, that there is an option for low-income communities to access financial services to avoid the high risk of people being driven into the hands of moneylenders, legal or illegal.

There is also a sense across the board that people have really had it with Irish banks. They have had it with the dismissive attitude the banks show to regular domestic customers. Services are being cut back all the time, it is virtually impossible now to speak to somebody even on the phone and it is quite clear our pillar banks are only interested in bigger and business customers. In circumstances such as this it is a real sickener for people who have managed to survive through what have been 12 very difficult years since the bank bailout to be treated with such disdain and disrespect. The public is definitely seeking an alternative type of banking, a conscientious type of banking that is not all about profit-making and where there is a return to the local community. It stands to reason that we should be doing that.

I have serious concerns about the extent to which Government policy over many years has been propping up our banks. An example of that is the insistence on credit unions placing the bulk of their deposits with the two pillar banks, which is a real obstacle to them playing a more active role and providing a wider range of banking services. The same applies to property prices. It is in the interests of the banks that property prices are maintained at a high level given the debts the banks incurred, but there has been very little sharing of the burden there. To a large extent, the rest of the ordinary people in this country continue to pay higher interest rates, high house prices and high charges in order to continue to prop up the banks. That is just not acceptable to the public. I have no doubt that if there was a public option available to people, it would be in enormous demand. I for one would change account in the morning if such an option was available. An awful lot of people feel likewise.

I reiterate my support for the changes proposed in this legislation. As I have said, much more is needed from the banks and this Government to restore trust and fundamentally change the Irish banking landscape but the Bill is certainly a step in the right direction. The retail banking sector is changing at an extraordinary rate but we must ensure it shows a willingness to change course. Ordinary workers should not have to accept a banking system that puts the needs of its shareholders above those of its customers. The reforms set out in this legislation will address some of the shortcomings in the retail banking sector but competition is urgently required. A strong, not-for-profit banking sector would achieve this and ensure local banking facilities in our communities. Ultimately, the State should not be afraid to intervene in a market that is utterly failing so many of its citizens.

5:17 pm

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Níl aon duine ón Rialtas. I call an Teachta Tóibín.

Photo of Peadar TóibínPeadar Tóibín (Meath West, Aontú)
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The banking crisis devastated Ireland. It affected the lives of millions of people in this State and forced hundreds of thousands of people to emigrate, many of whom have never returned. People who left due to the collateral damage of the banking crisis are living in Canada, Australia and all over the world. It loaded tens of billions of euro of debt onto this country and significantly reduced the level of investment in Irish society for a decade afterwards. We have less money to invest in housing, infrastructure, health and education as a result of the damage done by the banking crisis. The infrastructure deficit we experience as we travel to and from work, etc., is a result of the millions of euro that were spent paying off debt rather than being invested in this country. Every single man, woman and child in this State owes €47,000, which is a massive burden for individuals to have on their shoulders, especially in this time of economic crisis.

The shadow of the banking crisis reaches into the lives of people in today's world. The banking crisis was fuelled by years of light touch regulation, credit illiteracy among the Fianna Fáil Governments of the day and the bargain basement European interest rates available during the period. Of course, the European Union sets its interest rates on the basis of the larger economies such as Germany and does not pay any heed to the needs of the Irish economy. Before the banking crisis, we needed higher interest rates to cool down the housing market. Subsequently, the damage was magnified by a Fianna Fáil Government and the European Union, which saddled the people with the costs of the crisis. Greed, the absence of oversight from the administrations in Dublin or Brussels and the refusal to protect the Irish people when they needed it have cost us massively, right up to the current generation.

In the middle of all the human carnage that was caused, Ireland managed to maintain its impeccable record of never holding anybody to account. It was an amazing feat. To think that such a disaster could have been wreaked on every single household and practically every business in the country and is now being experienced in hospital wards, schoolrooms, creaking road infrastructure, etc., and nobody was held to account. This contrasts with what we saw in other countries such as Iceland and the United States where the architects of the damage were brought to account at some level.

While this Bill is welcome, it is 14 years late. That is the unfortunate, costly reality for many people’s lives. That it is before the House is welcome and many aspects of the legislation will lead to significant improvements in oversight, including the provisions to ensure individuals in these institutions fulfil their responsibilities properly and cannot be involved in practices that will be dangerous and costly to the companies in question and society. It provides for an ability to investigate properly and enforce decisions from those investigations. I welcome all those aspects of the Bill.

The Bill seeks to give significant regulation powers to the Central Bank to implement the individual accountability framework in respect of senior executives in regulated financial service providers. There is much in this Bill and good work in it. I wanted to mention those positive elements to the Government, the public service and the Central Bank. However, I am concerned about a couple of aspects of the legislation, although I stand to be corrected if I am not accurate. While there is no doubt the Central Bank is a repository of considerable expertise, this Bill feels like we are leaving much of the detail to be filled in by the Central Bank. In other words, we are giving a canvas that has a rough sketch of how this should exist in the future but asking others to fill it in. As the elected representatives of the people, we are ultimately responsible. We have a history of outsourcing responsibility to others. When we do that we lose control of that responsibility and oftentimes the result is not what it should be.

If the detail was filled in here, we would, with the advice of the Central Bank and financial and economic experts, be able to go over every aspect of this Bill to make sure it is robust enough to ensure that if we hit another crash in the future, the systems are in place to deal with it. I worry that there are gaps in this and that we are outsourcing it. I believe that is wrong.

I will raise a couple of elements. Will the Minister of State address the role of the High Court regarding decisions that have been made and any enforcement or penalties that are decided on? Does the role of the High Court mean that we will see litigation? One problem that we regularly discuss here with regard to commissions of inquiry is that they nearly get tied up for decades in litigation. The level of defence that is used costs the State and individuals significant amounts. It means that justice is kicked down the road by as long as 14 years. Justice denied for that long is no justice at all, truth be told. How will the oversight of the High Court work in real terms? I understand the High Court has to confirm decisions. I understand that citizens have rights under the Constitution which cannot be impugned unfairly. Will the Minister of State address that in his responses?

Enforcement is an important element in Irish society. We are heavy with legislation but light with enforcement in many areas, whether employment law, environmental issues or taxation. There is no proper enforcement. We can produce this wonderful Bill, but if the enforcement is not right, we will have a difficulty. This Bill seems to outsource that enforcement to the Central Bank. Section 48 of the Bill provides:

In determining under section 33AQ or 33AR whether to impose a sanction on a natural person, what sanction to impose on a natural person, or the level of any monetary penalty to be imposed on a natural person, the Bank shall have regard, together with any other relevant considerations, to any of the following that appear to it to be relevant.

This critical element appears not to have crystallised in the Bill. We will not have an effect on that critical element. We will not own it. We will not be able to design it. Therefore, it is in somebody else's hands. I feel that is a weakness.

We have another banking crisis on our hands in this country which leads from the previous banking crisis. It is the overconcentration of the market in the hands of just a few banks. This has not happened by accident. Michael Noonan designed the two-pillar bank system. He basically designed an oligopoly. Anybody with any understanding of economics knows that concentrated oligopolies such as this do not work for the good of the people. They have enormous power and can have influence over every aspect of engagement with the customer, whether it is on the price of the interest rate, the cost of handling cash, or retreating from towns and villages across the country with bank closures. In all of those aspects, the power lies with the banks rather than the people. If there is a far more fractured market, which is called a perfect competition market, with smaller banks, it means that more power and influence over those aspects of engagement is in the hands of the consumer. That is one reason banks are moving towards digitisation of all of this. It also means that smaller banks are finding it hard to compete effectively and profitably with larger banks because they have such small elements of the market.

I have no doubt that a focus on changing the market structure of the banking system in Ireland is needed. It is a pity that the Minister, Deputy Donohoe, has left the building. One way to do this is through a public banking system. It seems that every party, including the Minister of State's party, Fianna Fáil, is in favour of a public banking system, bar one. It seems that Fine Gael is the only political party that is building a barrier to the development of a public banking system. I want to find out why that is the case from Fine Gael. Why is a stakeholder public banking system, which operates successfully in other mature, well-functioning economies, deemed to be a threat in Ireland, given the overly concentrated market here? Stakeholder banking systems tend to have a more regional focus. They tend to be oriented more towards small businesses and small farmers. They tend to make sure that profits are pushed back into the sectors in which they are operating. They tend to be far more resilient. The German experience is that when the last banking crash happened, the public banking system was far less likely to suffer a significant loss. It is mind-boggling, given the overconcentration in the banking system, the flight of so many banks from the country and the alternative opportunity that public banking represents, that Fine Gael is so against it. It is probably why Fianna Fáil has not managed to lever Fine Gael into making a positive decision. Some might say that Fianna Fáil has done that with the ban of evictions over the winter. Why is there weakness with regard to the public banking system?

Sula gcríochnóidh mé, caithfidh mé a rá go bhfáiltím roimh an mBille seo. Is Bille tábhachtach é gan dabht. Ba cheart go mbeadh oversight ag an mBanc Ceannais ar na comhlachtaí airgeadais atá ag obair timpeall na tíre. Is léir gan an oversight sin go mbeidh contúirt mhór fós ann, an chontúirt go dtitfidh an tír go hiomlán as a chéile mar a tharla leis an ngéarchéim bhainc 12 bliain ó shin. Cuirim fáilte go hiomlán roimh an mBille seo.

Tá cúpla ceist agam. Táim buartha faoi chúpla rud. Ba mhaith liom go mbeadh an Rialtas sásta freagra a thabhairt faoi na rudaí seo. Conas a bheidh an Ard-Chúirt in ann na cinniúintí a chur i bhfeidhm go tapa gan costas mór ar dhaoine agus an Stát sa todhchaí, ionas nach gcuirfimid go leor cumhacht chuig an mBanc Ceannais chun na bearnaí a líonadh mar gheall ar na cumhachtaí nach bhfuil istigh sa Bhille? Ba mhaith liom dá mbeadh an Rialtas sásta na ceisteanna sin a fhreagairt.

5:27 pm

Photo of Thomas GouldThomas Gould (Cork North Central, Sinn Fein)
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Sinn Féin has been proposing this legislation since 2019. We welcome that the Government is finally moving on it. It is long past time for white-collar crime to be dealt with by the law and treated as what it is. It is not a victimless crime. Those who suffered during the financial crash will say that. I am still dealing with families who were affected by that financial crash. There was news today that the Central Bank will increase mortgage-to-income ratios and reduce the deposits required for second-time buyers, which is yet another indication of just how badly this Government has failed with housing. Unfortunately, once again, we see measures that will only be inflammatory. Experts are already telling us that this will drive up house prices. People cannot afford to pay more. They need their Government to step in to build truly affordable homes. The Government is thankfully backtracking on the ban on evictions. It is missing housing targets every year. We have the highest number of homeless people ever. We now have a case study on why market-led home delivery is not just a bad idea, but a disaster.

The Central Bank rules were introduced in the fallout of the crash to prevent it from happening again. The reality is that the crash could happen again and again because no one paid for the bad financial decisions that got us here.

At that time, we bailed out the banks but not the people. We had a Fine Gael Deputy in here yesterday using dehumanising labels to describe people in addiction. He refused to withdraw that comment. He has been a Deputy for 20 years and has only referred to the bank bailout once. We are faced with the reality that Fianna Fáil and Fine Gael Deputies are more concerned with labelling vulnerable people than with holding those in power to account.

The root cause of addiction is poverty. That has been shown through research. Yet instead of tackling poverty this Government is too busy subsidising developers, speculators and the banks. The people feel the Government let the bankers away with daylight robbery in the last financial crash. Thankfully, this Bill goes to address some of the issues. It tackles concerns on white-collar crime and that is welcome. We need a financial banking sector for the people and that is why the Government needs to do more with An Post and credit unions to ensure that ordinary people have access to banking. That is about banking for people and not for major profits.

5:37 pm

Photo of John McGuinnessJohn McGuinness (Carlow-Kilkenny, Fianna Fail)
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I welcome the fact that this Bill is before the House and that I will have the opportunity to address issues within it on Committee Stage. The Bill is long overdue. We witnessed a massive financial crash from which we are still recovering. That still has consequences for individuals in this State, particularly those trying to raise a mortgage and paying high interest rates. While this will hold bankers to account, at least that is what the short note said, I hope it does. What steps will the Minister take in regard to this Bill to include vulture funds? They have wreaked havoc throughout the country. They continue to do so. They are the arm of the mainstream banking system that provides the muscle necessary to allow the banks to get some money out of the process by selling the loans to vulture funds. It then allows vulture funds to appoint receivers and again to ride roughshod over the rights of individuals, families and small businesses. If the Bill does not go to that extent to protect those who find themselves in the hands of vulture funds, then we are not doing the banking system any good.

We are not addressing the issues of accountability and transparency in the banking system. The vulture funds refuse to come before the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach. That has been the case this term and last term. As we demand accountability and ask them to appear, they just turn a blind eye to us and continue on with the devastation they are causing. Time and again in this House, I and many other Members have raised this issue and asked for the matter to be addressed. We were told by various politicians in the past that these vulture funds are necessary and are good for the economy. Let me make it clear that I have not come across any activity of a vulture fund that would lead me to believe that they are good for the economy, particularly the Irish economy or Irish society. While they may help to address the bank balances and the positions within each bank, they do not do any good for society or families that are affected by them.

What section in this Bill deals comprehensively with vulture funds? What section puts the onus and an obligation on them to appear before the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach? If that matter is not addressed in the Bill, perhaps on Committee State or Report Stage we will see a change emerge in that regard.

It is also clear from what is going on with the banks currently that they are almost back to treating customers in the same way that they treated them in the past. The tracker mortgage issue is an example of the outrageous behaviour of banks. The Central Bank imposed fines on the banks that were found guilty of not treating tracker mortgage holders properly. It is said that those fines were significant, but they were not. In each of those cases, they were reduced by 30%. I want the Central Bank to be able to impose a fine that does not represent nickels and dimes to the bank in question but that it is a really substantial sanction for the bank and that there is some mechanism whereby we can show that the bank cannot pass the sanction on to its customers in fees and charges. That has to be examined, and the Central Bank has to have a significant role in policing it.

I would also like to see that when a bank is fined and when it is stated that there was significant poor practice in the bank, the Central Bank can outline clearly what it found in its investigations. Not enough is said about the investigations. Not enough information is given on the outcome of those investigations. Until such time as this House is prepared to pass legislation insisting on that and on naming and shaming the individuals concerned in the bank, we will continue to have bad practice in banks. I have looked at the boards of directors in different banks. They have not changed substantially since 2008. There have been no moves by the banks to ensure that, from a public perspective, it would be seen that they and their boards have changed. A decision had to have been made somewhere in the banks regarding tracker mortgages. That is a fact. A decision had to be made about various investment funds that went wrong, about tied agents that were involved with banks and are now being treated badly.

All of this is part and parcel of a banking culture that was the biggest aspect of the cause of the crash in 2008. The political response has been weak. It has taken too long to come to this in regard to holding individuals to account. Will the Minister of State ensure that not only the regular banks are caught in these regulations but that the vulture funds are made to answer to the committees of this House in the context of the regulations and legislation we put in place?

Photo of Marc Ó CathasaighMarc Ó Cathasaigh (Waterford, Green Party)
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If the House and the Minister of State agree, I propose to take the Rural Independent Group slot now.

Photo of Mattie McGrathMattie McGrath (Tipperary, Independent)
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I thank the Acting Chairman. I appreciate his forbearance. We did not see this matter listed on the schedule. We thank the Acting Chairman for allowing us in to contribute to the Second Stage debate on the Central Bank (Individual Accountability Framework) Bill 2022. That is a mouthful.

I have great respect for the Minister of State. I have great time for him as a colleague, a backbencher and now as a Minister of State. However, the banks are running amok. It seems to me that the Government wishes to allow them to run amok. It introduces legislation and tell them this and that but there is a monopoly in there. It is a very worrying situation now. Deputies Michael Collins, Nolan and I visited a number of banks on behalf of customers. KBC was one of those banks. KBC is exiting the market and the country now along with Ulster Bank and others.

We will have less competition.

I will never forget the night of the bank guarantee, and I am tired of repeating this. My single biggest political mistake was voting for that, following the pleading of the late Brian Lenihan and others. However, I pressed the button, although there were no buttons at that time and we had to walk through the lobbies. Ever since, they have created a crisis and pushed us all into a state of collapse. They got a bank guarantee and debts written off. Then it came to the so-called bailout, which I described as a clean-out, and I voted against it.

The Taoiseach is running off admiring, and is beholden to, the globalists in Europe even though the French and Germans are going to destroy our agriculture and other aspects as well. We have a very troubled European project now as far as I am concerned and we are net losers all over the place. When we got the so-called bailout, we got money from the IMF at 2.9% but we paid 6% to our European friends. Can you imagine that? At that stage, the bondholders were insured as well. They laughed all the way to the bank. Not only were the insurers not called in, the Irish taxpayers were the patsies. The Minister of State’s grandchildren, if he has any, and my grandchildren and their children will probably never pay it off. It was an enormous, savage amount of money. It was unbelievable.

What we have seen happening in the past couple of years has been totally distasteful. Retired Members of this House, of Members of European Parliament and of different places are now advocates for the banks. They are only out the door here a wet month or wet week. Surely, in this legislation, we must have a barrier put in so that politicians and public servants, who are in senior positions in the Department of Finance, cannot become advocates, advisers or you name it name for the banks. This is putting the fox in charge of the hen house. The Minister of State has much work to do. However, I do not see any appetite within the Department of Finance and within the Government to deal with the banks.

I refer to the tracker mortgages and the massive fines that were imposed on banks. Whose money did they pay the fines with? Account holders' money was used to pay the fines, so it was the public’s money that was used to pay the fines. The fines were minuscule compared the billions of euro in profits that they made. The Minister of State has no appetite to tackle the banks or CRH Roadstone, plc. He wants the taxpayers to pay the cement levy and for bad products as a result of no regulation.

The Government has no appetite to go after the insurance companies. I am tired of talking to the Minister of State about insurance companies. That wonderful thatched-roof pub in Ballylooby got flooded the other night, making it worse. The has pub closed. The wonderful Keating family had insurance all their life but now they cannot get insurance for it as a domestic building. It was flooded on Sunday night so when it rains, it pours on some people. It is unfortunate. The Government cannot tackle the insurance companies, the banks or anything.

We are bringing in feeble and inept legislation here. It is pathetic. The public is sick and tired of it and we are seen all over the world as having a soft touch. We will table amendments on vulture funds. Michael Noonan welcomed these people to this country. Imagine the word “vulture”. How many people would want a vulture when they see what it would do to a pet lamb when it is being born? There are connotations there and the name is appropriate. They must be accountable to the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach and the Committee of Public Accounts.

We have seen recently where Departments have refused to come before several committees, including some of which I am a member. That cannot be allowed. We are tasked to legislate and be accountable to the people and we must make sure that we do that.

5:47 pm

Photo of Michael Healy-RaeMichael Healy-Rae (Kerry, Independent)
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Governance, oversight and holding people to account is of massive importance to everybody, especially when it comes to the banking sector. Today, colleagues and I met with the Central Bank to discuss changes that it announced. Again, like everything, it seemed to have left many people behind. It still is insisting on 10% being made available from people’s savings if they are looking to purchase their first home and take out a mortgage for it. That is putting awful and undue pressure on those people. If they could prove the ability to pay a larger amount - in other words, 95%, if not the full amount - why not loan them the full amount? There would be absolutely nothing whatsoever wrong with that.

Coming back to what we are discussing here, as recently as 27 September, in what has become the largest fine to date issued by the Central Bank, Bank of Ireland was fined more than €100 million for what was noted a series of significant and long-running failings in respect of nearly 16,000 tracker mortgage customers’ accounts between August 2004 and June 2022. These failings by Bank of Ireland resulted in the loss of 50 properties, 25 of which were family homes. I will repeat that. Some 50 properties were lost, 25 of which were family homes. This could have been avoided if the Bank of Ireland complied with its most basic and fundamental obligations.

However, despite the massive and life-changing impact of this awful scandal by Bank of Ireland, not a single banker there was personally held accountable. In fact, those responsible continue to work at the bank and obtain bonuses and pay rises, while some of the impacted families are left with no homes. I, sadly, know people who were affected by this. They came to me at clinics throughout County Kerry. They were obviously traumatised by what was done to them. I do not want to say the bank responsible walked away scot-free, because of course it was fined, but there was not really an implication for it. However, where were the real people - the mothers, fathers, sons, daughters and grandchildren who were deprived of their homes and properties – left? They were left nowhere. What satisfaction did they get? None. One of the most valuable things that can be stolen from somebody is time. Everyone of us will run out of time before we run out of money. We have to think about that. Those people’s time and property was taken from them by a bank that would not adhere to proper governance. That is inexcusable. When you rob an individual of that, you are robbing them of something you cannot get back to them. Compensation or anything else will not put them back to where they were.

Remember, our banks owe us a lot. When I say “us”, I mean the people of Ireland. We bailed them out. I want to remind people when they are going to the bank with their cap in their hand, looking for a loan and assistance, that they are our banks. We own the banks. They would not exist in the first instance if it was not for us. If a young couple or a businessperson can prove that they have the ability to pay back a loan and if they have a track record, they should be able to get a loan. If they are working and can prove that they are workers and are looking for money, the bank should not be putting them down or make them beg, scrape or plead for their money. It is our bank in the first instance.

Going back to how banks started, the whole ethos behind them was the gathering and disbursing of money and the charge of interest to make people’s lives better and to let them get on with their lives. However, we seem to have a situation now in our main banks, including AIB, Bank of Ireland and the others, that they will make a small, little thing out of you. They will push you down and grind you down and leave you without money if they thought they could get away with it. It is fine for other people who can stand up for themselves. However, what about the young couples? They are the people starting out in life and the ones who I am worried about.

Photo of Michael CollinsMichael Collins (Cork South West, Independent)
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I thank the Acting Chair for giving us the opportunity even though our time had gone. I appreciate that.

The introduction of the individual accountability framework is supposed to help build on the reforms that have taken place in the regulation of the financial sector in Ireland since the financial crisis and introduce new financial regulation with an emphasis on individual and personal accountability and responsibility.

I will tell the Minister of State about a constituent I have. She has spent the past 14 years trying to hold onto her home. She bought the house 16 years ago based on an engineer’s report that the bank requested. She was able to buy her brand new home for herself and her unborn child at the time. The engineer’s report told her and the bank that her home-to-be was structurally sound, so she was fine to go ahead with her mortgage. Less than two years later, she found out that there were huge structural problems in her home. She contacted engineers, HomeBond, solicitors, etc., to try to resolve the situation. Finally, after months and months, she had some repairs carried out by the original builders.

Between HomeBond, engineers and solicitors, however, she was conned on every corner. She was told by Bank of Ireland representatives at the time to stop paying the mortgage. She was advised by the bank representatives - these were the people who had the house structurally checked initially and cleared it - to sue her engineers. The Bank of Ireland representative in question has since been fired, apparently, and the saga has gone on for 14 years.

5:57 pm

Photo of Marc Ó CathasaighMarc Ó Cathasaigh (Waterford, Green Party)
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I remind the Deputy that it is not the practice to make individuals identifiable.

Photo of Michael CollinsMichael Collins (Cork South West, Independent)
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I do not think I have named anybody here yet, thank God.

Photo of Marc Ó CathasaighMarc Ó Cathasaigh (Waterford, Green Party)
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We are getting to a point where he is going into specific details.

Photo of Michael CollinsMichael Collins (Cork South West, Independent)
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Yes, but I have not mentioned anybody by name.

Photo of Marc Ó CathasaighMarc Ó Cathasaigh (Waterford, Green Party)
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I am asking the Deputy to take care.

Photo of Michael CollinsMichael Collins (Cork South West, Independent)
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I will not mention anybody's name. I well know the rules and regulations here.

This morning, after 14 years, she got a call to say the bank was repossessing her home - the home she owns and lives in with her child. This is only one of many stories. There is much more involved in the case than I have the time to relate to the Minister of State here today. The banks and others need to give honest answers in respect of this case but they will get away with it.

I was talking to another lady, a constituent of mine, today. She was seeking to remortgage her home and initially she got mortgage approval from ICS Mortgages. All of a sudden, however, the ICS had no funds, so she went to Permanent TSB, where she got approval. All she was looking for was an amount equal to twice her salary. It should not have been a problem and, in fairness, it was not - she got approval. Two months later, she is still waiting for the documentation to come from the bank. Her solicitor has all her documents ready to go yet she is still waiting. She wanted these funds to do up her home so that she can rent out two rooms. That would mean she is going to look after two extra people who are probably on a housing list. This lady has done everything right but the delay in her mortgage papers being sent is going to cost her more and more. Two months ago, building material was cheaper than it is today. Furniture was cheaper than it is today. She and others believe this whole scenario of delaying mortgages is happening across the board and behind it all is ripping people off and driving the price of property even higher. Of course, interest rates are increasing as well. That lady would have had a deal done some time back but the bank is not signing off on it.

I suggest that the Bill does not go far enough when it comes to the regular person on the street. From what I have heard and seen, the behaviour and culture of Irish retail banks is despicable. I have no faith in what this legislation is intended to do as I and my constituents believe the banks are a law unto themselves. One just has to look at what happened with tracker mortgages. Bank of Ireland was fined more than €100 million for what was noted as a series of significant and long-running failings relating to nearly 16,000 tracker mortgage customer accounts between August 2004 and June 2022. Despite the massive and life-changing impact of that grotesque scandal at the hands of Bank of Ireland, not a single banker at the bank was personally held accountable. In fact, those responsible continue to work at the bank and obtain bonuses and pay rises, while some of the impacted families are left without a home.

In the little time I have left, I ask the Minister of State, Deputy Fleming, why we still have had no answers regarding the fiasco during summer when AIB tried to pull the wool over customers' eyes by deciding to withdraw its cash facilities to customers. Did the Minister of State know about that? Did the Minister, Deputy Donohoe, or the Minister, Deputy Michael McGrath, know about it? The Minister of State opposite has no interest in what I am saying anyway because he is continually going across the floor to talk to somebody-----

Photo of Marc Ó CathasaighMarc Ó Cathasaigh (Waterford, Green Party)
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The Minister of State is engaging with his officials-----

Photo of Michael CollinsMichael Collins (Cork South West, Independent)
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I know that, but I am engaging here and the least the Minister is supposed to do is to engage with Deputies when they are speaking. When I was elected to Dáil Éireann I believed I was entitled to that much anyway, but if I am not, that is fine. If the Acting Chairman thinks differently-----

Photo of Marc Ó CathasaighMarc Ó Cathasaigh (Waterford, Green Party)
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If the Deputy asks his questions, the Minister of State will respond.

Photo of Michael CollinsMichael Collins (Cork South West, Independent)
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I sincerely hope he does because I want to know whether he knew about the banks becoming cashless. Did the Minister, Deputy Michael McGrath, or the Minister, Deputy Donohoe, know about it? Nobody in this Dáil has come before the people to say they knew and they made a mistake. The decision to try to make AIB cashless was reversed but the it was a shocking decision in the first place.

Photo of Richard O'DonoghueRichard O'Donoghue (Limerick County, Independent)
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The cost of the tracker mortgage scandal, between compensation and the cost to the banks in fines, was €1 billion. I understand the Minister of State, Deputy Fleming, is speaking to an official but I would appreciate it if he were to listen when I am speaking to him. I just mentioned that €1 billion was the cost of the tracker mortgage scandal and the Minister of State went across the floor to speak to his official while I was speaking. Please do me the courtesy of listening to me. I was speaking about €1 billion and the Minister of State disappeared to speak to his official. Do me the courtesy of listening to me when I am talking. The cost of the tracker mortgage scandal, between compensation and the cost to the banks in fines, was €1 billion. The intention of the Bill is to change the culture across firms and ensure that individuals will no longer be able to evade personal responsibility for the conduct of the companies they run.

It is well documented that the banking crisis cost €5.4 billion, yet Irish Nationwide was only fined €23,000. That is likely to continue under the Bill. I could go on all day long about what the banking crisis has done to families and farm owners. A case in the High Court last year involved the banks having sold on the debt from farm to a third party but the law states that one cannot sell on land as a third party debt. One can sell on a property, such as a house or a business property, but one cannot sell on third party land. The banks continued with that practice, however, and accrued more fines in the courts, and pushed farmers to the pin of their collar even though the banks are not supposed to be able to do it. That is the farmers.

Then we go to business owners. They were scraping to survive through hard times. At one stage, banks were ringing people and trying to hand them money. They were telling people they could borrow more. The second that there was any bit of a slowdown, however, they closed the doors on everyone and took everything out from underneath business owners and bullied their way through and took back properties. They pushed families that were trying to pay for their homes out of them. They demanded full repayment and refused to meet with lenders. They told homeowners that they wanted the full amount or they would take back the house.

The banks then dealt with multinationals that were buying hundreds of houses. They put them together in a package and sold them off to the banks. The banks sold them off for peanuts even though the people who were going to repay those loans would have repaid more in the long term if the banks had stuck with them. The bail-out of the banks in this country was a scandal. The people of this country were there to back the banks but, when the crunch came, the banks and the Government were not there to back the people. That seems to be repeating itself every time there is a new Government. Not only do the banks not back the people, now the Government does not back them.

Now we are in another crisis yet every time my colleagues and I come up with a solution, the Government lets its Departments come up with crazy ideas on how to fix things but all they do is drive inflation and put more hurt on top of people who are trying to pay their way. Let us not repeat the mistakes of the past. The Minister of State has been here long enough to learn that. What this Government has not learned, however, is that the Rural Independents are the only true voice of the people in this country. In spite of that, the Government has failed to listen to us. Every time it makes a mistake, it has to do a U-turn and come back to exactly what we said in the first place.

Photo of Ruairi Ó MurchúRuairi Ó Murchú (Louth, Sinn Fein)
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All Deputies accept the absolute need for standards, sanctions and accountability in the context of the banking sector, so there will be general support for the idea behind the Bill. I do not think any Member will have a major difficulty with the four tenets, whether that is the senior executive accountability regime or new conduct standards for the regulated financial service providers, particularly in the context of management and staff. There is no difficulty in the context of enhancements to the Central Bank's fitness and probity regime and, obviously, all Members would all call for greater enforcement capabilities for the Central Bank.

That goes without saying. We need to ensure that we have a framework that can deal with the problems that we have had in banking. Yes, many have said before that this all should have happened earlier. We all know the pain and hurt that was caused by the tracker mortgage situation and it is not just the financial impact but also the societal impact it had on families. We know if we go back to the banking crisis, we had untold damage done across the board to significant sections of this society and to very significant numbers of families who are still reeling from the pain.

It is fair enough to say that there was a failure of Government at that particular time to stand up, an absolute failure by the European Union, and beyond that, an acceptance on some level that that journey or direction towards austerity was not the correct methodology. This is a conversation one has when one is talking to stakeholders across Europe, whether one is talking about parliamentarians from other European countries or those directly involved with the European Commission. It was an abysmal failure and we are very lucky to have got through it to the degree that we did. As bad as it was, it could always have been worse.

We need to ensure that we give a sufficient amount of capacity to the banking sector in not having to revisit that situation. I would also add my voice to what has been said on the absolute necessity to ensure we do the pieces that are necessary, whether we are talking about An Post or the credit unions. I know that Connect Credit Union Limited has set up a new current account hub in Clanbrassil Street in Dundalk and is taking on those customers from the banks which are leaving these shores. That is good to see but we know that there are certain rules and regulations that need to be changed in respect of freeing credit unions up to be able to provide the financial services which are offered by banks.

We all see why the Central Bank has changed some of the rules on lending but the problem is that we are doing this within a dysfunctional set-up which will not be sorted until we deal with the supply issue. Gabhaim buíochas.

6:07 pm

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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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.

Question put and agreed to.