David Cullinane (Sinn Fein) | Oireachtas source

I welcome the Minister of State to the House. My party supported this Bill in the Dáil and will support it in the Seanad. Previous speakers noted we had a lax culture of enforcement and supervision, and cronyism in the banking sector, in this State for far too long. This led to the collapse of the banking system and, conversely, the collapse of our economy and the consequences that flowed from it. I support anything that improves supervision and enforcement within banks.

Several Senators asked if this goes far enough. More work remains to be done on supervision of the banks and changing the culture of the banks, which is the most important aspect. At the heart of the problem in the banks is a culture within them. I raised this point with the CEO of AIB in his meeting with my party. It is important each bank looks at its culture and practices. The State must ensure the Central Bank has robust supervision and enforcement mechanisms but we must also put responsibility on banks to ensure the culture in the banks is what it should be.

We had competition between banks during the Celtic tiger years, which led to dodgy practices. There was also competition within banks between staff and pressure was put on employees to reach targets, achieve sales and provide loans to people who should never have had loans. That must change. While we can do as much as we can at the level of the State and pass legislation for supervision, we must change mindsets and cultures in the banks. That is more difficult and challenging but is also important.

The Bill goes some way to rectifying the bad culture we had. Vigilance is key and we must keep the legislation under review and ensure it is being reinforced in the spirit and the letter of the law. The most important thing is that it is implemented so that we have the resources and capacity to ensure we have proper supervision. That was one of the failures of the past. One of the failures of the past was the close relationship between the regulator and the banking sector. We must examine the separation of that relationship and healthier relationships for the State and the customers. We must have best practice rather than what passed as enforcement and scrutiny of the banks during the Celtic tiger years.

I also welcome the protection and provisions concerning persons reporting breaches, or whistleblowers. I put this point to the CEO of AIB with regard to putting responsibility back on banks to see what they have done. It is important the Government continues to do this. We are bringing in senior bankers and asking them how they have changed the culture in their banks across these issues. They should be accountable to us, particularly the banks that have taken huge amounts of taxpayers' money. The Bill addresses some of the issues and provides long overdue protection to whistleblowers. This is important because where there are bad practices in banks, it should be exposed and people should have the freedom to expose it without suffering as a consequence. I welcome the protection for whistleblowers.

I welcome the accommodating attitude of the Minister when the Bill was passing through the Dáil. A number of recommendations by my party and Fianna Fáil were accepted. My party recommended that reviewers be subject to adequate punishment and recommended allowing the Financial Services Ombudsman to include a description of the complaints upheld. These suggestions were accommodated by the Minister. The Fianna Fáil initiative on naming and shaming and bringing debt management companies into regulation are important additions to the Bill. The Minister accepted these suggestions in an accommodating way. I hope the Central Bank acts swiftly and brings debt management companies under regulation as soon as possible.

I will press two outstanding issues and I hope the Minister can accommodate us. We see no reason debt collectors cannot be brought directly under the remit of this Bill. The Department of Justice and Equality has a role to play but the purely financial service that debt collectors provide means they can be brought within the remit of this Bill. We will table amendments in the Seanad as the Bill progresses to Committee Stage. We wish to see the Financial Services Ombudsman empowered to name and shame without preconditions. This means removing the three complaints rule, which we do not see as being of real value. We see problems with it, although I can understand its logic. I read the contributions made in the Dáil on Second Stage and on Committee Stage. I can see the logic but allowing the Ombudsman to name and shame should be an important part of improving supervision.

This is comprehensive legislation that is, as Senator Gilroy said, to be welcomed and supported. Anything Members can do to improve the supervision of the banking system is important. At some point, the economy will recover to the extent we need it to and there will be an uptake in the housing and property markets. We will get to the stage where the banks will lend more but it is also important not to revert to how it was, where it was far too easy to get credit. Banks were sending false cheques to people and they were invited to contact the bank to get €10,000, €20,000 or €50,000. It was very irresponsible. Cheap money was being thrown at people and we can now see the consequences of it. It also shows the cosy culture between a small number of developers and banks that were really developer banks. There were competing with each other and lending to developers in a crazy way. We know the consequences of it. A huge amount of work remains to be done and the real test will be when there is economic recovery. We will then see whether the checks and balances are robust enough to protect us from what happened in the State in the past.