Bernard Durkan (Kildare North, Fine Gael)
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Question 258: To ask the Tánaiste and Minister for Finance if he is satisfied with regard to the adequacy of measures to prevent fraud in the banking system; and if he will make a statement on the matter. [2751/08]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The primary responsibility for managing a bank and for preventing fraud within that bank rests with the board and management of that institution. No supervisory regime can ensure that a financial institution can never be a victim of fraudulent activity. However, it is a key principle of our regulatory approach that any financial institutions are expected to have in place internal oversight, reporting and risk management systems commensurate to the nature, size and complexity of their operations that are up to the task of properly managing and controlling the risks with which they deal and minimising the scope for fraud.

As Minister of Finance I am responsible for the legal framework governing financial regulation. In the context of the legislative framework put in place, responsibility for the supervision of credit institutions is a matter for the Irish Financial Services Regulatory Authority.

I am satisfied that we have a robust and effective legislative framework for supervision and regulation of financial institutions, and that the establishment and operation of the Financial Regulator provides an appropriate organisational structure for the enforcement of that framework. I would of course consider any approach by the Financial Regulator in relation to new legislation in this regard, if the Financial Regulator regards this as necessary.

The remit of the Financial Regulator is quite broad and covers a wide range of financial service activities. All in all the Financial Regulator supervises more than 10,000 financial service providers of varying size and nature, including banking, insurance, collective investment, asset management firms, as well as credit unions, exchanges, retail intermediaries etc. Our regulatory regime meets best practice international standards. This was confirmed by an IMF assessment in 2006.