John Gilroy (Labour) | Oireachtas source

I welcome the Minister of State to the House. It is always good to see him here. I also welcome this complex and dense legislation. It must be viewed as an intricate legislative super structure that surrounds the Central Bank and financial legislative items. Several hundreds of these items or threads could permeate the legislative structure of the financial services. The date of the Bill is 2011 but it has only arrived in the House today and that goes a long way to explaining its intricacy.

The Bill's passage through the Dáil was fairly trouble free and I wish to acknowledge that the Bill enjoys the support of all sides in both Houses. I know that Fianna Fáil, an Opposition party, tabled some prescient amendments in the Dáil. The Minister, in his wisdom, decided to accept most of them and incorporated them into today's Bill. That was a welcome development.

I do not need to remind Members why the legislation is necessary so I shall not dwell on the matter. I have a few technical questions for the Minister of State. Section 21 relates to the powers and functions of the authorised officer and mentioned "a regulated financial service provider" or the "former regulated financial service provider." Is the provision similar to sections 7 and 8 by providing retrospective legislation? If so, that is welcome. Hopefully, it is also wise.

It is welcome that the authorised officer has wide-ranging powers under the Bill’s provisions. Were such powers available to the Central Bank and other regulatory authorities and wielded in an appropriate manner, would they have set off an early warning of the financial armageddon lurking beyond the horizon? Do these regulatory powers go far enough to allow another such scenario to be detected? I hope that one will not arise again.

I wish to make a point on general legislation on the Central Bank and regulation. As a national central bank, the Central Bank forms part of the European system of central banks. Can this legislation or any related legislative provision reach into the area that examines the management, mismanagement, governance or misgovernance of parts of an Irish bank that operates in the EU but not in this jurisdiction? What is the relationship between this Bill and the legislation on such issues? For example, there seemed to be peculiar behaviour at Anglo Irish Bank Austria as late as end of summer or early autumn 2008. It had deposits of more than €1 billion, yet Anglo Irish Bank’s directors had indicated to our Government that it was experiencing a liquidity problem. We now know that it was not a liquidity problem. At that most critical point, Anglo Irish Bank Austria sold its deposits. At the very least, this was peculiar.

Had this legislation existed at the time, could our Financial Regulator, observing peculiar behaviour outside this jurisdiction by a body licensed as a bank or incorporated in Ireland, have acquired information to determine what was happening? Will the Bill allow for that in the future?

I welcome Part 5 on whistleblower protection, but the issue is more complex than the Bill allows. I welcome the Minister of State’s remark that further legislation to protect whistleblowers more robustly is on the way.

I wish to cite an example of a whistleblower who made it known to the regulatory authorities in 2007 that there was a suspected breach of liquidity ratios by a bank operating in the Irish financial services sector. At the time that he made his allegation, he was the person responsible for ensuring liquidity ratios were not breached and, as such, would have been sanctioned by the criminal justice system. The protection offered to him in one respect was not offered under other criminal legislation. Naturally, he went no further with his complaint. These issues are complex and intricate, but the Bill is welcome.

Part 10 requires regulation of debt management companies. This morning, Senator Harte and I held conversations with representatives of the industry. They expressed their concern that the current lack of regulation in the area leaves wide scope for less-than-optimum practices. Like us, the industry welcomes the proposal on a robust regulatory system.

I will enjoy Committee Stage. I thank the Minister of State.