Martin Mansergh (Fianna Fail)

I welcome the Minister of State and his officials. The decision on the regulatory authority was one of the most difficult and important made by the previous Government, and today's debate partly reflects the one which took place over two or three years. It was a very important decision and held up for some time until the Government clarified the direction in which it wanted to go. As an observer in a previous capacity, without having been involved directly, I was always of the view that one could not separate the regulatory and consumer protection functions. Senator Higgins said the two were at opposite poles but I am not sure that is true. The worst prejudice to the consumer is if a financial institution collapses and he or she loses money.

I am not surprised that legislation of this importance is not rushed through both Houses. One has to move carefully. It may be true that other much larger countries have adopted different models but we must ask what suits a country of this size with its specific culture. The legislation provides the correct answer to this problem. There is no doubt that regulation was very dispersed with sections of Departments such as the old Department of Industry and Commerce and its more recent manifestations having roles to play. There is merit in bringing the functions together.

The legislation gives a new role to the Central Bank which has devolved upwards some of its functions to the European Central Bank, although it is still important to have expert monitors and advisers to Government, both on input and the implications of the European Central Bank's decisions. Given the increasingly complicated and sophisticated world of finance, expertise needs to be developed. In the general Civil Service staff inevitably move from section to section, thus not staying sufficiently long in particular roles to gain expertise. Therefore, it is correct to transfer the responsibility from the Civil Service proper to the new, expanded authority.

Senator Higgins quoted the Central Bank giving evidence that it had not been involved in consumer protection. That may be true of the existing Central Bank, but the legislation provides for a new authority – it will, to a certain degree, be a hybrid authority – that will assume responsibility for this function.

The IFSC has grown in the past 15 years. It has been a tremendous success and one of the things it has praised is the fact that we have light but effective regulation in this country. A recent article in The Irish Times referred to it as a "global entrepreneurship monitor" and praised the Government's pro-business strategy. The article also stated that, in terms of regulatory functionality, Ireland is fifth among industrialised countries. The Bill will further improve the position in this regard.

For a country of Ireland's size, there is huge merit in having a one-stop shop system. In the early years, the IFSC was, de facto, facilitated with a kind of one-stop shop system through IDA Ireland. There are approximately 50,000 people employed in the financial sector, although probably no more than 20% of them are employed at the IFSC or are connected with it.