Bernard Durkan (Kildare North, Fine Gael)
Link to this: Individually | In context

Question 89: To ask the Minister for Finance if he is satisfied regarding the adequacy of the regulatory system to detect, monitor and address issues that have arisen heretofore in the financial markets or are likely to arise in the future; and if he will make a statement on the matter. [31768/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

In Ireland 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. 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.

EU Finance Ministers have adopted an extensive roadmap of actions incorporating a work programme aimed at putting in place a comprehensive response to developments in financial markets. This roadmap includes reviewing along with the EU's international partners how to further improve transparency of complex financial instruments, valuation standards, the prudential framework, risk management and supervision and market functioning including the role of ratings agencies. Earlier this year ECOFIN Ministers and Central Bank Governors agreed an extended Memorandum of Understanding on financial stability contingency planning between financial supervisors, central banks and finance ministries that incorporates common principles and practical guidelines for cross-border cooperation. This EU framework facilitates timely information exchange and sharing of views and assessments between my Department and the CBFSAI on issues related to financial stability.

Bernard Durkan (Kildare North, Fine Gael)
Link to this: Individually | In context

Question 90: To ask the Minister for Finance if changes are proposed to enhance the monitoring of the economy by the Central Bank or his Department with a view to earlier identification of economic trends and the putting in place of corrective measures; and if he will make a statement on the matter. [31770/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

My Department continually monitors the emerging economic position and advises accordingly. But the Deputy will note that economic forecasting is not an exact science and this time last year the vast majority of commentators were not expecting the scale of the slowdown we are currently experiencing. In fact the forecasts produced at Budget time last December were seen as being conservative and below the consensus view that pertained at that time. In terms of its monitoring role, in July of this year my Department published revised economic forecasts in order to inform both the public and policy makers regarding the scale of the slowdown.

In terms of corrective measures, in early July the Government decided on a number of measures in order to manage public spending so that emerging pressures could be best accommodated within the planned expenditure level for 2008, while laying the basis for a sensible budgetary strategy for 2009. Furthermore, earlier this month the Government decided to bring forward the Budget for 2009 to October 14th. This reflects the necessary prioritisation of expenditures in light of expected tax revenues and will give clarity and confidence to investors and taxpayers alike and provide a sound basis for economic recovery.

Finally, I would like to remind Deputy that the determination of operational matters in the Central Bank is solely a matter for the Central Bank and Financial Services Authority of Ireland. However it is fair to say that the Central Bank like other organisations produce regular economic forecasts and commentaries.