Wednesday, 3 February 2010
Department of Finance
Financial Services Regulation
Question 122: To ask the Minister for Finance his views on whether any of the events or actions of parties involved in the collapse of the banking and property sector, which occurred since September 2008, contain lessons for the future. [5244/10]
The Deputy may wish to note that a number of important measures are already being implemented reflecting the lessons learned from the banking crisis since September 2008. The impact of the crisis on the banking system in Ireland has emphasised the importance to the wider economy of the framework for financial regulation as well as the links between financial regulation and functions of central banks. The reform of regulatory structures which I announced on 18 June 2009 will underpin a much more effective and efficient financial services regulatory system. In particular, the reforms will see the establishment of a single fully integrated institution, the Central Bank of Ireland Commission, with responsibility for both the supervision of individual firms and the stability of the financial system generally. The proposed new structure will address a number of the significant weaknesses disclosed in the current system, in particular the need for increased cooperation and coordination between those responsible for monitoring financial stability, and those charged with the prudential supervision of individual institutions, and the prioritisation of prudential supervision of institutions as a central objective of the regulation of the financial system.
At EU level, a comprehensive programme of reforms is currently underway building on the recommendations contained in the de LarosiÃ¨re report in particular (to strengthen risk management on both a micro- and macro-prudential levels, including improvements in risk management in individual firms; improved systemic shock absorbers; reductions in pro-cyclical amplifiers; strengthening transparency; and improvements in the incentives in financial markets and in directors' remuneration). The EU roadmaps on financial supervision, stability and regulation, which were agreed at ECOFIN Council in 2007, and subsequently updated in 2008 and 2009 to reflect the evolving nature of the financial crisis, deal specifically with strengthening EU arrangements for financial stability and actions taken in response to the financial turmoil.
Finally, in relation to the events or actions, since September 2008, of parties involved in the collapse of the banking and property sector, I have already set out in DÃ¡il Ãireann that any wrong-doing that has come to light since September 2008 and which was a continuation of previous practices should, in my view, be investigated by the Commission of Investigation.