Paddy Burke (Fine Gael) | Oireachtas source

I congratulate the Minister of State as well and wish her well in her portfolio.

This is very important legislation. We have seen over the years the hardship and so on that was visited at many doors in this country - not just in this country but right around the world - from the crash until now.

The first two paragraphs of the explanatory memorandum set out quite clearly what the Bill purports to do:

The principal purpose of the Bill is to confer powers on the Central Bank of Ireland to strengthen and enhance individual accountability in the financial services industry. This is to be achieved by prescribing responsibilities and providing for the allocation of responsibility and accountability for the management and operation of regulated financial service providers ... to individuals, while maintaining a balance with the responsibilities that properly belong to the firms themselves.

What exactly is meant by "maintaining a balance with the responsibilities that properly belong to the firms themselves"?

The memorandum goes on to state:

The Bill will provide for obligations on RFSPs with respect to governance, management arrangements and senior executive accountability; by providing for conduct standards setting out standards of behaviour for RFSPs and individuals performing functions in relation to them; and by providing for the sanctioning of individuals who breach their responsibilities under financial services legislation.

In fairness to Senator McDowell, he has raised a very important aspect of the Bill. We saw with tracker mortgages and with the crash that the Central Bank was slow enough to take up a lot of issues. I refer to the Jonathan Sugarman case, where he brought to the attention of the Central Bank practices that were taking place in financial services that he as an accounting officer was not happy with, and it was quite slow to act. Jonathan Sugarman, as a whistleblower, was treated very poorly. He was unemployable afterwards. To this day, he is unemployable.

With tracker mortgages, the Central Bank had to be brought before the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach on numerous occasions to bring it back on track with what was happening.

Various financial services are provided, and new products are always coming on stream. Is it the Central Bank that decides on the product? Does it have to vet every product that is sold by individual financial institutions, be it a credit union, banking service or insurance company that is providing the product? Where does the buck stop? Senator McDowell has raised a very legitimate question. It could be an individual at the lower end of the scale that makes the decision on the sale of the product. Perhaps he or she did not properly understand what senior management said, or he or she did not interpret the rules properly and ended up in hot water. As Senator McDowell says, they are on their own. I presume there is no free legal aid for them, unlike what Deputy Paul Murphy was able to tap into when he went to court.

I welcome the legislation. There must be accountability because we are dealing with people's money. However, issues arise, and I hope they are addressed when we go through the Bill in detail on Committee Stage. The Minister of State, Deputy Carroll MacNeill, is very capable in this regard and she will be able to give us the answers we require. Senator McDowell has raised an important issue about this aspect of the Bill.