Joan Burton (Dublin West, Labour)
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Question 191: To ask the Minister for Finance his views on reports that the cost of administering the Financial Regulator is running at three times the cost of inflation; if he will address calls from the regulator's industry panel to review the relationship between the Financial Regulator and the Central Bank; his views on whether the State is getting value for money for the service provided by the regulator; if he will implement a review of procedures in the Financial Regulator; and if he will make a statement on the matter. [13988/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I presume that Deputy's question refers to the projected increase in Financial Regulator's expenditure for 2007 as compared to its estimated outturn for 2006. This was raised in the Financial Services Industry Consultative Panel's observations on the Financial Regulator's budget for 2007, furnished to my Department in December 2006. The 2007 budget is based on the activities which the Financial Regulator proposes to undertake to achieve the goals detailed in the Strategic Plan 2007 — 2009 published in November 2006. I have been informed by the Chairman of the Regulatory Authority that the increase in the Financial Regulator's budget for 2007 is largely attributable to the objective, noted in the Industry Panel's submission, of filling of its full staff complement of 350 staff in 2007.

The Chairman of the Financial Regulatory Authority has advised me that the Authority views it as a critical part of its role to ensure that a robust annual budgetary process for the Financial Regulator is undertaken and, in addition, that costs are kept under regular review. The budgetary process is, accordingly, conducted under the guidance of a Budget Committee consisting of non-Executive Members of the Authority. The Chairman also pointed out that the Financial Regulator's projected expenditure for 2007 represents an increase of 6.1 per cent as compared to the budgeted figure for 2006 and that staff costs account for about 70 per cent of the Financial Regulator's overall expenditure.

As far as the issue of shared services is concerned, the relationship between the Financial Regulator and the Central Bank derives from the Central Bank and Financial Services Authority of Ireland Act 2003 which established the Financial Regulator. The corporate structure of the Central Bank and Financial Services Authority enables the Financial Regulator and the Central Bank to share the corporate resources and support services of a single organisation. This sharing of resources and services achieves savings by avoiding unnecessary duplication of support services and corporate infrastructure. This structure promotes the highest level of cooperation and communication across the organisation and realises economies of scale through the sharing of services and resources. The Central Bank and the Financial Regulator have confirmed that they are committed to ensuring effective and efficient management of shared corporate and support services.

I understand that the Comptroller and Auditor General is undertaking a value for money examination of the Financial Regulator. The Deputy may wish to note that the Financial Regulator has undertaken to establish an action plan to address any recommendations arising from this report. Finally the Financial Regulator is committed under its Strategic Plan 2007-2009 to the development of a more comprehensive set of indicators which will further enhance the monitoring of all aspects of its performance.