Joe O'Toole (Independent)

I should declare an interest. I am the director involved in this situation as a member of an inquiry committee. The real issue for the supervisory authority is a critical one. These are very litigious times. There has not been a week in recent months where a Member of this House has not asked a question about who is carrying out the investigation into this or that latest scandal from banking areas. It is a very litigious area, as we have seen. We saw one court case go up and down the structures of the court and back again.

As a young authority the supervisory authority is concerned that were there to be a successful challenge against the authority, we would appear to be ineffective, not doing our duty, etc. Every care is being taken on the issues being dealt with here. One of them is the delegation of authority from the board to the sub-committee. Effectively, if we are examining something being done by the accountants or auditors of a stated bank or whatever, two sub-committees of the board are set up. One is the preliminary inquiry committee which establishes whether there is prima facie evidence to be examined in detail. It is completely separate from the board and its minutes are not available to it. That sub-committee can come back and call for an investigation. A new committee will then be set up under section 24 and go through the detailed investigation. The problem with all of this is that responsibility is being transferred twice to sub-committees of the board. There is no doubt that is the intention, but because the Act does not specifically state it, it could be argued it is silent on it and, therefore, the board is not empowered to do some of these things.

Some of these inquiries can last for some time. It will almost invariably happen that a director who is a member of one of these committees will run out of time by a couple of months. It could then be argued that the inquiry committee was not properly empowered in some way. This matter was of concern to all the members of the supervisory authority and was brought to the attention of the Minister of State. The board will be relieved this is being acted upon so quickly because there was a worry it might be held back until the main Bill was introduced. This gives certainty and allows for due process.

We are now opening a new argument where smart lawyers will say another section does not state the authority can do this. In this other situation about which we are talking the Act outlines the board's exact powers and how it can delegate authority. It could be argued, therefore, that it cannot do the other because it is not specifically mentioned in legislation, that it will be necessary to structure everything rather agreeing the intention of the Act — that the board, like any properly functioning board, will use its own judgment to ensure it is brought forward.

Section 9 of the primary legislation outlines the functions and authorities of the board, including any other powers required of it to fulfil the objectives contemplated by it. There is a catch-all provision, therefore, but our lawyers were worried that this was not strong enough and could be challenged. This will be a belt and braces approach that will give certainty to some of the investigations raised on both sides of the House related to accountants and auditors who were in the middle of decisions taken by well known banks.

I welcome this and emphasise to my colleagues how necessary it is. The issue I raised has been addressed, but it will arise again and again in the future. Therefore, it is important.