James Reilly (Dublin North, Fine Gael)
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Question 90: To ask the Minister for Finance if he plans to change the institutional arrangements for financial regulation; and if he will publish an assessment of issues in advance of finalising decisions. [6283/09]

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.