Tony Killeen (Clare, Fianna Fail)

In respect of amendments Nos. 17 and 22, the Minister for Finance has asked officials in his Department to undertake a process of consultation with the Central Bank, the Financial Services Regulatory Authority and representatives of the financial services industry with a view to examining how a move to 100% funding of the regulation of financial services by the industry might come about. In a statement to the industry in December 2009, the Governor of the bank signalled his expectation of an increasing degree of industry funding for financial regulation. Shoestring regulation will not work and the Minister is mindful of the points made in the recent banking reports on the past under resourcing of regulators.

The Bill makes provision for the Central Bank to seek value for money and it will be subject to audit by the Comptroller and Auditor General. The levy provisions set out an open regime whereby the Central Bank must make a transparent statement of its requirements and must seek to match revenue to expenditure on an ongoing basis, subject to certain provisions for flexibility. The Bill strikes a balance between resourcing the Central Bill on the one hand, while not giving it a blank cheque on the other. However, the resourcing of our regulatory system should not be subject to an industry impact analysis that fails to take account of the wider economic and societal costs of regulatory failure. It will take many years before the levies cover the cost of rescuing the banking system.

The Bill's provisions as they stand address the many considerations that must be borne in mind, including the issues outlined by Senator Donohoe. Accepting amendments Nos. 17 and 22 would distort the balance somewhat by making it more difficult to achieve our shared aims in respect of the functions of the Central Bank and the Financial Services Regulatory Authority.