Joe O'Toole (Independent)

There is an important point here which may give the Minister the opportunity to enlarge upon the functions of the regulator. In these Houses we have consistently restricted the functions and powers of the regulatory authorities — all of them — because we have never liked to "interfere with the market", as the term is used. I have lost many arguments on this issue over the past 20 years. Is the reason for subsection (3) that the current financial authorities do not have adequate powers for the additional scrutiny the Minister has now taken on board? If so, this subsection is crucial. Otherwise, the demands we are making of the Minister could not be fulfilled by the regulatory authorities. At the same time, however, the regulatory authorities must fulfil their prudential function and monitor issues such as liquidity, which was mentioned by Senator Burke.

It is crucial that all the authorities work together. My understanding is that the regulatory authorities have indicated they are quite willing to take on additional scrutiny on the Minister's behalf, under the terms specified by him. People should recognise that, for instance, the regulatory authorities have required the banks to have additional capitalisation to deal with speculation and so on. The regulatory authorities have, for instance, defined speculation for banking terms. Any speculative investment in housing, for instance, is deemed to have occurred where 50% of the houses have not been sold. Levels of liquidity, capitalisation and loan to value ratios must be undertaken on that basis. This work must be done, as it is done at the moment.

There are issues such as this and I want to add a question. The eighth or ninth directive from Europe on common audit standards in the European Community still has not been transposed by the Government. There are issues of quality assurance attached to that. It is very important to recognise that the Government should move swiftly on that. This would clarify the points raised by Senator Burke and ensure the role of the Minister has some checks and balances attaching to it by accommodating the European common audit standards.