Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael) | Oireachtas source

There have to be fair procedures at every stage. I want to go through some of the engagement that was correctly highlighted with the committee at an earlier stage. The fair procedures have to work both ways. For example, there is the six-year rule highlighted by Senator Black and the look-back in regard to fitness and probity. The reason that is being introduced is that there was a concern that a person who had reason to believe they would be the subject of a fitness and probity investigation could prevent the investigation by simply resigning, that is, by a strategic resignation in advance of that, which limits the opportunity to conduct that investigation. This is a measure to reverse the balance of fairness on that side.

Senator Gavan raised section 15 around the discontinuance of an investigation. I will make two points in that regard. First, the Senator focused on resources. The Minister, Deputy Donohoe, when he wrote back to the committee that had raised that question, said he wholeheartedly agreed that the Central Bank should not be prevented by lack of resources from conducting any investigation that it considers necessary. To quote the Minister, he said it is “a view with which I wholeheartedly agree”. He went on to say that it was entirely within the discretion of the Central Bank as to whether to conduct the investigation or not, and a corollary of that discretion is the discretion to cease or discontinue it. It is not simply a question of the Government holding back resources from the Central Bank. It is about the discretion of the bank to continue with it or otherwise.

Second, that section is also very important because it speaks to the need to provide an individual with the reasons for the discontinuance of an investigation, and it speaks directly to the point Senator McDowell has raised around fair process. If I am investigated for something and the investigation is ceased, the mere fact of the naming of the fact I was investigated could act as a barrier to my future employment or to my opportunities elsewhere. The reason for discontinuing the investigation should be as transparent as the taking of it in the first instance. As I see it, the change in section 15 is a measure to try to rebalance that.

With regard to the delay, it was not a matter of cynicism from the Government but due to awaiting the outcome of the Supreme Court case in regard to fair procedures across financial institutions and the State more broadly. The Zalewski case, which I referenced in my opening remarks and which required much better and fairer procedures right across the board, only concluded in 2021, so there was some period needed to implement that.

Senator Black highlighted what came out of the retail banking review in regard to bonuses. When I look at the banking sector, some people jump immediately to the executives within the banking sector, whereas I actually look at the many thousands of people who work at clerical and middle management level, all of whom were prevented from receiving any sort of recompense in a way that might easily have been obtained in other sectors. That has to be addressed over time.

The crucial point about this legislation is that it is about trying to improve culture more broadly, trying to balance fair procedures and trying to be proportionate. While the penalties may vary up to €1 million for an individual, the necessity is to be proportionate at every level, and I know Senators will be well aware of that. There is provision for training and for relevant resources in that regard. Much of the balance around that can be addressed in the consultation period. It is my understanding that the Central Bank will leave that open for a period of up to three months, with three months for analysis, and that is following the consultation that has already been done.

We look forward to engaging further on Committee Stage. This Bill is the latest step in enhancing the Central Bank’s regulatory powers. Senators are correct to raise the role of the Central Bank and the financial services architecture generally in the crash. There has been a real focus on transforming the culture within the State's response to that but also the culture in financial services organisations. That has been a key focus of financial regulators in general internationally in recent years.This Bill will place the Central Bank among the most forward-looking of those regulators.

As the House is aware, the Bill has been the subject of ongoing consultation and pre-legislative scrutiny going back to April, and I know the Minister has addressed the points raised by the committee at that stage. Of course, it has been through the House. This really is about driving individual accountability for decision-making at all levels but particularly at senior level in financial institutions. The overall aim is one that is protective rather than trying to be punitive. It is trying to prevent misdemeanours from happening in the first place by encouraging a genuine cultural change driven, as I said, at CEO level and managed from the office of the CEO. Success will not be measured in terms of the number of sanctions meted out but by a transformation and enhancement of culture, which I hope will make enforcement less necessary.

Like everybody in the Seanad, I want to see a financial services sector that prioritises customers, that is well and highly regulated and where honest, ethical and professional behaviour is the default for everybody working in the industry. This Bill adds to the changes we have already made and will help to ensure the financial services industry in Ireland is one that meets those needs. We have an internationally well-regarded regulatory system for financial services here. It is a mark of respect to have Irish regulation as opposed to other regulation elsewhere, and it is, if not a strong marketing tool, then a strong tool in the arsenal of any organisation precisely because of how well-regulated we are now comparatively. This Bill adds to that and adds to the quality of regulation. I commend it to the House.