Lucinda Creighton (Dublin South East, Fine Gael)
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Question 89: To ask the Minister for Finance the terms of reference of the commission of investigation into the banking sector; and if he will make a statement on the matter. [35570/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The Deputy will be aware that under Section 3 of the Commissions of Investigation Act 2004, a Commission of Investigation may be established by Government Order, once a draft of the proposed Order and a statement of reasons for establishing the Commission have been laid before the Houses of the Oireachtas and a resolution approving the draft has been passed by each House. A resolution approving the proposed Order was agreed by both Houses on 8 July last and the Commission of Investigation (Banking Sector) Order 2010 (S.I. No. 454 of 2010) was signed by the Taoiseach on 21 September 2010. The terms of reference, as set out in the Order are:

"a commission is established to investigate the following specific matters considered by the Government to be of significant public concern and requiring, in the public interest, an expedited examination:

(a) the main causes of the serious failure, during the period 1 January 2003 to 15 January 2009, within each of the covered institutions, to implement and adhere to, appropriate standards and controls (including checks and balances) in the context of corporate governance and prudent risk management policy and procedures such as would have avoided the requirement for the provision of exceptional financial support from the State;

(b) the main causes for the adoption, during the period 1 January 2003 to 15 January 2009, by the Boards of Anglo Irish Bank Corporation and Irish Nationwide Building Society of business models and strategies, and the implementation by the senior managements of those institutions of business and lending practices, which resulted in those institutions experiencing severe financial distress;

(c) whether in respect of the period 1 January 2003 to 15 January 2009 the external auditors of the covered institutions commented in their audit reports or other communications to the institutions concerned on the failures referred to in subparagraph (a) or the business models and strategies and business and lending practices referred to subparagraph (b);

(d) the main causes for the failures, during the period 1 January 2003 to 28 September 2008, in the performance of the statutory roles and responsibilities of the Central Bank and Financial Services Authority of Ireland in respect of the regulation and supervision of the covered institutions and the maintenance of financial stability, in particular in relation to the supervision and oversight of corporate governance and risk management policies and practices in the covered institutions, and the relevance in that regard of any advices or directions given by the Department of Finance to the Central Bank and Financial Services Authority of Ireland in relation to its supervisory role.

The Commission shall complete the report or reports required in relation to its investigation no later than 6 months from the date of its establishment."

I might add that during the debate in the Dáil on 8 July 2010 on the motion to approve the Order establishing the Commission, I agreed to seek the approval of the Government for an amendment to the terms of reference to extend the period to be investigated by the Commission of Investigation from 28 September 2008 to 15 January 2009 in respect of subparagraph (d) above. Subject to the agreement of the Government, a draft amending Order will shortly be laid before both Houses for approval. The terms of reference are also available on the Commission's website at www.bankinginquiry.gov.ie .