Joe Costello (Dublin Central, Labour)
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Question 242: To ask the Minister for Finance if he will establish a commission of investigation to examine the failure of the Financial Regulator to adequately regulate the banking system here, to report within three months and to make recommendations for comprehensive regulation of financial institutions; and if he will make a statement on the matter. [1013/09]

Tom Hayes (Tipperary South, Fine Gael)
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Question 262: To ask the Minister for Finance his views on appointing a commissioner of investigation to examine the functioning of the financial and banking system, its functioning with the Financial Regulator, and to make recommendations on the necessary changes in the very near future. [1205/09]

Michael Ring (Mayo, Fine Gael)
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Question 279: To ask the Minister for Finance if he will appoint a commissioner of investigation for the Irish banking system (details supplied). [1489/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I propose to take Questions Nos. 242, 262 and 279 together.

In the area of prudential regulation, the Financial Regulator applies regulatory rules to a range of banking activities in accordance with national, EU and international requirements. The importance of having a regulatory system that provides financial stability and fosters probity has become all the more clear to us now in a time of severe financial dislocation, both nationally and internationally. I have already acknowledged that there were shortcomings in the financial regulation oversight of our banks, not least in the case of the concealment of loans to former directors of Anglo Irish Bank, which has done serious damage not only to the Bank concerned but to Irish banking generally. A better form of regulation is now required with a greater degree of focus on areas such as risk management, compliance, liquidity management and general control processes.

There are a number of reviews under way within the Financial Regulator with a view to identifying any shortcomings in the Financial Regulator's strategic regulatory approach, its structures and its capacity to respond. I await with interest the outcomes of these reviews and will be working with the Regulatory Authority to bring about improvements in our system of financial regulation. As the Deputy will appreciate, steps have already been taken in that regard in the Credit Institutions (Financial Support) Scheme and, as a result of this, the oversight of the banks concerned has been greatly intensified.

The new regulatory framework in Ireland must also have regard to EU and international developments in the global financial regulatory framework. In relation to the EU, there are a number of proposals being developed for adoption this year, including improvements to the Capital Requirements Directive to further strengthen the existing banking prudential framework for risk management. Furthermore, the role and mandates of national regulators has been the subject of in-depth consideration by the ECOFIN Council.

Common reporting standards for financial institutions are being introduced to enable greater EU wide consistency in supervision. Proposals will be introduced this year following the report of the de Larosiére Group, on ensuring prudential soundness, the orderly functioning of markets and stronger European co-operation on financial stability oversight, early warning mechanisms and crisis management. An initial report on this matter is due to be submitted to the Spring European Council and any reform of our Financial Regulator's structures will be consistent with EU developments. In view of the national and international reviews of financial regulator frameworks already under way, I do not consider that a separate commission of investigation would be appropriate at this time.