Joan Burton (Dublin West, Labour)
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Question 86: To ask the Minister for Finance if his attention has been drawn to reports (details supplied) of major breaches of financial regulations in respect of liquidity requirements by a significant financial institution in the International Financial Services Centre; the actions he has taken on foot of these reports; if he has discussed these reports with the Financial Regulator, the Central Bank Governor, the Office of the Director of Corporate Enforcement or any other relevant authority; if a full investigation has been carried out, or is ongoing, to ascertain the veracity of these reports; if he envisages the introduction of new legislation, regulations or enforcement measures to ensure that breaches of this nature do not take place in the future; and if he will make a statement on the matter. [44557/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The Deputy may wish to note that the supervision and oversight of liquidity requirements for credit institutions is a regulatory matter for the Central Bank of Ireland. The Central Bank of Ireland is subject to strict confidentiality requirements under the EU Supervisory Directives and consequently does not share information on specific regulatory issues with my Department unless the issue gives rise, for example, to some broader financial stability issue in respect of which the Minister should be informed. These circumstances did not arise in this instance. However, in response to the Deputy's question my Department has been informed by the Central Bank of Ireland that an overnight liquidity breach was reported by an institution at the time referred to in the reports enclosed with the Deputy's question. The Central Bank followed up on this liquidity breach with the institution, which rectified the position to the satisfaction of the Central Bank at the time. The Central Bank also required an external review of liquidity reports submitted to it and the related control environment. This review did not identify material issues relating to breaches of the required liquidity ratios, other than on the date highlighted by the institution.

The Central Bank imposes liquidity risk management requirements on all credit institutions. These are set out in 'Requirements for the Management of Liquidity Risk,' which are available to download from www.financialregulator.ie . Compliance with these requirements is monitored by a combination of on-site and off-site review and inspections. All credit institutions are required to complete an annual internal audit review and submit this report to the Central Bank on compliance with the Requirements. In addition, Section 47 of the Central Bank Act, 1989, provides that where a credit institution's external auditor has reason to believe there are material defects in the financial systems and controls or accounting records of an institution or has reason to believe that there are material inaccuracies in or omissions from any returns of a financial nature submitted to the Central Bank, they are required to notify the Central Bank without delay.

The Central Bank of Ireland has confirmed that this matter has now been fully investigated and the Central Bank is satisfied that all liquidity risk management requirements have been complied with and appropriate steps necessary to prevent any recurrence of this issue have now been taken by the institution concerned.