Bernard Durkan (Kildare North, Fine Gael)
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Question 134: To ask the Minister for Finance if he is satisfied that sufficient structures, guidelines and regulations are in place and operational to safeguard the stability of the banking and financial services with particular reference to lending and borrowing policies, insider dealing, money laundering or other activities likely to have a knock-on effect or implications for the wider economy; if specific changes are proposed; and if he will make a statement on the matter. [21942/08]

Bernard Durkan (Kildare North, Fine Gael)
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Question 180: To ask the Minister for Finance if he is satisfied that adequate protective procedures and practices exist to protect the integrity of banking and financial services from unscrupulous operators, from within and outside the system; and if he will make a statement on the matter. [22289/08]

Bernard Durkan (Kildare North, Fine Gael)
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Question 181: To ask the Minister for Finance if steps were taken by banking international services here to prevent the occurrence here of financial scandals similar to those in other jurisdictions; and if he will make a statement on the matter. [22290/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I propose to take Questions Nos. 134, 180 and 181 together.

The role of the Minister for Finance as regards financial regulation is to develop policy and bring forward proposals to the Oireachtas for the regulation of the financial services sector. Once that legislation has been enacted, the task of implementing and applying it on a day-to-day basis rests with the Financial Regulator, which is independent in the exercise of its function.

The most important safeguard of financial stability is the existence and effective operation of the financial regulatory and supervisory regime. The Central Bank and Financial Services Authority of Ireland integrates within a single institutional structure both the supervision of individual financial firms by the Financial Regulator and the monitoring of overall financial stability which is the independent responsibility of the Governor of the Central Bank. This structure yields significant advantages in terms of monitoring and maintaining financial stability in ensuring effective and timely co-ordination of these two key functions.

The assurance of financial stability is, of course, an ongoing task. To this end, both entities maintain an ongoing and open dialogue with the domestic credit institutions to review issues affecting the domestic financial system. As far as the current financial market environment is concerned, the most important point that needs to be made in the national context is that Ireland's banking system is well-capitalised, profitable, liquid and soundly regulated in this regard.

It is important to emphasise that the framework for financial regulation here is shaped by a detailed and comprehensive template, which applies across the EU. There have been a number of positive assessments of the effectiveness of our system of financial supervision. The recent OECD economic survey of Ireland gave high marks to the Irish regulatory system. The International Monetary Fund and the World Bank in their assessment of the stability of Ireland's financial system also commented very favourably on the progress achieved in strengthening the regulatory and supervisory framework in Ireland.

There are obviously important lessons to be learned from recent events in international financial markets. This process of review and examination has been underway for some time. The Deputy may be aware that arising from an Ecofin Council meeting in October 2007, EU Finance Ministers agreed on a set of common principles and a roadmap of further actions to enhance financial stability arrangements and the ability of authorities to respond to serious disturbances in EU financial markets. A further detailed set of conclusions on financial stability and financial supervision in the EU were adopted following the Ecofin Council meeting last month. Ireland is of course participating fully in this ongoing work to ensure that there is an effective EU-wide system to maintain financial stability taking into account the important cross-border linkages that now exist in EU financial markets. My Department is also continuing to work closely with the Central Bank and Financial Services Authority of Ireland to oversee national financial stability planning arrangements in line with EU requirements.

As regards protecting a bank against fraudulent or unscrupulous operators, both internal and external, I would remind the Deputy that the primary responsibility for managing a bank lies with the management of that institution. No regulatory authority can put in place a supervisory regime to ensure that a financial institution can never be a victim of fraudulent or reckless trading activity from within. It is up to management to have appropriate controls to prevent or detect such activity. The Financial Regulator works closely with the financial institutions which it supervises to ensure that they remain focused and alert to these risks and have robust and effective controls in place.