Eamon Gilmore (Dún Laoghaire, Labour)
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Question 100: To ask the Minister for Finance his views on whether the practice of financial institutions lending money for the sole purpose of facilitating the purchase by a third party of shares or securities, or financial instruments derived from such shares or securities, in that same institution is contrary to any provision of law; his further views, in particular, on whether, in his opinion, such practices would contravene Section 60(13)(a) of the Companies Act 1963 or similar legislation; if the relevant legislation is somewhat deficient in this respect; if he proposes to change the legislation in this regard; and if he will make a statement on the matter. [6344/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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As the Deputy is aware, investigations by the ODCE and the Financial Regulator are in progress in relation to certain transactions. It would be prejudicial to the investigations for me to comment on the legality of the action of any party. The Companies Act, 1963 is a matter for my colleague, Ms. Mary Coughlan TD, Tánaiste and Minister for Enterprise, Trade and Employment.

Arthur Morgan (Louth, Sinn Fein)
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Question 102: To ask the Minister for Finance the steps being taken to reform the financial regulatory system; and if he will make a statement on the matter. [6296/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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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. A new and better co-ordinated approach to ensuring financial stability and regulation is clearly now required, with a greater degree of focus on areas such as risk management, compliance, corporate governance and general control processes.

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. This new regime provides for a heightened direct engagement with each of the covered institutions and new reporting arrangements including the provision of Scheme compliance certificates by the covered institutions themselves and by their external auditors.

The Bank Guarantee Scheme requirements and conditions are the first step in a new system of financial regulation and supervision. The joint Boards of the Central Bank and Irish Financial Services Regulatory Authority are considering further reform measures and I hope to receive their report very shortly. In addition, regulatory reviews, both domestically and at an international level, are underway including the following:

The Regulatory Authority is reviewing its overall strategic regulatory approach with a view to ensuring that the Authority meets its statutory mandate and responds to EU developments in financial regulation;

The Financial Regulator Business Process Review, designed to improve its effectiveness and value for money, is now close to finalisation;

The Financial Regulator is also processing a strategic plan for 2009, which will address the particular EU and Guarantee Scheme requirements for 2009;

At EU level, new regulatory proposals, including improvements to the Capital Requirements Directive, are due for adoption in early 2009, and more generally

At Ecofin Council, which will incorporate the work being carried out at a wider international level, the role and mandates of national regulators are now the subject of in depth consideration and arising from this it can be expected that proposals will be forthcoming on matters such as prudential soundness, the orderly functioning of markets and stronger European co-operation on financial stability oversight.

I propose to take account of the various reviews that are underway on regulatory reform. As Minister for Finance, I am responsible for the legislative framework within which the Financial Regulator operates. When I have considered the issues fully, I will bring my proposals for reform to Government.