Tom Parlon (Laois-Offaly, Progressive Democrats)

I thank all the Senators for their contributions, although I cannot respond individually to all the points made. Indeed, some of these points will require serious reflection. However, it is fair to say the record of today's contributions should be read carefully by anybody who claims to have a serious interest in the regulation of the financial sector.

Many of the issues raised are already being dealt with by IFSRA under its existing powers. These powers will be further strengthened in the legislation which is due to come before the House shortly. There has been much activity recently in regard to the regulation of the financial sector. Last year's legislation sponsored by the Government established by the Irish Financial Services Regulatory Authority which is proactively managing the AIB situation. The resources being made available to IFSRA will ensure that it can effectively carry out its functions. These functions are now very much extended, particularly in the context of the protection and the education of the consumer.

IFSRA, in the short time since it was established, has taken a good number of actions to protect consumers and the financial system. It has been proactive in developing consumer protection and information. This is in addition to dealing with investigations such as that arising from the AIB matter. We should await the results of IFSRA's detailed investigation before coming to a conclusion on that case.

Codes of practice are an important tool in financial regulation. They existed in some financial service providers before IFSRA was established. Last December, IFSRA introduced interim codes for insurance companies, mortgage intermediaries and money lenders. Good advice principles are incorporated in all these codes but they are not completely uniform across all sectors and products. This lack of uniformity may prevent consumers from fully understanding their rights. To establish this, IFSRA is seeking to develop unified codes which will meet both consumers' needs and international best practice.

IFSRA recently finished a public consultation process. Their consultation document made a point of seeking comments on the needs of older clients. The penalty provisions provided for in the legislation going to the Dáil today will also apply to the enforcement of those codes. If a regulated entity ignores or breaches those codes, the regulator will be able to penalise it. Likewise, if a consumer feels he or she has been mis-sold a product, that person will be able to go to the statutory financial services ombudsman for redress once the Bill has been enacted.

I will turn briefly to issues of compliance with the legislation and the compliance culture generally. Senators will be aware that the Central Bank and Financial Services Authority of Ireland Bill 2003 will shortly be coming before this House. Provisions in that Bill will give the financial regulator the power to require the directors of a financial institution to provide it with a compliance statement. Once the Bill has been enacted, the regulator will have the power to require the directors of a financial institution to provide, on a tailored basis if necessary, a statement on their compliance with specific legislation, such as the Consumer Credit Act 1995, or a specific code, such as the code of practice for credit institutions issued under the Central Bank and Financial Services Authority of Ireland Act.

I should also mention that, apart from the provision in this Bill, the Companies (Auditing and Accounting) Act 2003 will impose an obligation on company directors to prepare and publish a directors' compliance statement. That statement must cover the company's compliance with the Companies Act 1990, tax law and any other enactments that provide a legal framework within which the company operates and that may materially affect the company's financial statements. That will also embrace the legal framework within which regulated financial services companies operate.

Financial sector regulation poses immense challenges for all us legislators. In his contribution, the Minister for Finance, Deputy McCreevy, explained the broad range of activity, both regulatory and legislative, going on at present. We should acknowledge that lessons will be learnt from recent situations and that IFSRA will now have the powers that it needs for that. Our response to such matters should make us better prepared to meet future challenges and new issues as they emerge in financial service regulation. All stakeholders — the Government, the Oireachtas, the regulators and the financial institutions — will need to be constantly vigilant so that consumers' needs can be treated as a priority.