Seanad debates

Thursday, 27 June 2013

Central Bank (Supervision and Enforcement) Bill 2011: Committee Stage

 

4:00 pm

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael) | Oireachtas source

These amendments seek to increase the maximum penalty under the administrative sanction regime tenfold, from €500,000 to €5 million for an individual and from €5 million to €50 million for a body corporate. It is important that the fines are of sufficient scale to act as a deterrent to those who seek to profit from breaching their requirements.

The Bill already proposes significant increases in fines. For example, there is a proposal to double the individual maximum from €500,000 to €1 million. There is a second proposal to increase the maximum fine for firms from €5 million to €10 million, or 10% of turnover, whichever is the greater. This links the size of the fine to the size of the company.

In addition, the Bill provides for redress where customers who suffer a loss because of poor practice by financial service providers and restitution which will ensure that firms or individuals who make illegitimate gains from breaching requirements do not get to keep these gains. Restitution is particularly important for firms or individuals who have the financial ability to pay fines without difficulty.

Overall, these changes provide for a serious level of sanction, redress and restitution where the circumstances warrant it. However, in acknowledging the need for credible sanctions we should never forget that the primary purpose of regulation is to ensure that the standards in place are supervised, respected and abided by with appropriate early intervention by the Central Bank to address the problems.

On the basis that the fines are being substantially increased in the Bill, I do not propose to accept these amendments.

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