Regina Doherty (Meath East, Fine Gael)
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To ask the Minister for Finance the changes in auditing and regulatory practices that have been enacted since the banking crash in 2008 and since the appointment of a person (details supplied) as head of regulation at the Central Bank of Ireland; and if he will make a statement on the matter. [55186/12]

Michael Noonan (Limerick City, Fine Gael)
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I have been informed by my colleague, the Minister for Jobs, Enterprise and Innovation, that Directive 2006/43/EC of the 17 August 2006 introduced new rules on statutory audits of annual accounts and consolidated accounts. The Directive provides for the reinforcement and harmonisation of the statutory audit function throughout the EU. It clarifies the duties of statutory auditors and provides for their independence and ethical standards; introduces a requirement for external quality assurance; provides for public oversight of the audit profession, including third country auditors, and improved cooperation between oversight bodies in the EU. It also provides a basis for international cooperation between regulators in the EU and in third countries. It also requires listed companies to set up an audit committee with clear functions to perform.

By means of S.I. No. 220 of 20th May, 2010, effect was given to those aspects of Directive 2006/43/EC not already provided for in Company Law.

In relation to financial regulatory practices, the Central Bank Reform Act 2010, replaced the previously related bodies, the Central Bank and Financial Services Authority of Ireland and the Irish Financial Services Regulatory Authority, with a single unitary body, the Central Bank of Ireland (the Bank) and provided for new powers to be exercised by the Bank to ensure the fitness and probity of nominees to key positions within financial service providers and of key office-holders within those providers.

Following on from the Central Bank Reform Act, 2010, the Central Bank (Supervision and Enforcement) Bill was published in July 2011. The bill enhances the Central Bank’s regulatory powers, drawing on the lessons of the recent past in Ireland and abroad, and strengthens the ability of the Central Bank to impose and supervise compliance with regulatory requirements and to undertake timely prudential interventions. The bill also provides the Central Bank with greater access to information and analysis and underpins the credible enforcement of Irish financial services legislation in line with international best practice. The Central Bank (Supervision and Enforcement) Bill 2011 is expected to be enacted in the first quarter of 2013.

During 2011, the Bank updated its action plan for strengthening supervision of credit institutions across a comprehensive range of areas. As part of its supervisory work, the Bank launched PRISM (Probability Risk and Impact System), its new risk assessment framework which establishes a new adaptive approach for supervisory engagement with regulated firms.

The Bank published a revised Consumer Protection Code in October 2011. The review of the Code, which came into effect on 1 January 2012, represents the most significant strengthening of protections for consumers of financial institutions since the launch of the initial Code in August 2006.

The Central Bank advises me that its regulatory activity has intensified with increases in staff numbers and skill levels. The Central Bank has also taken a number of measures under its "Banking Supervision - our new approach" to banking supervision which they introduced in June 2010 and updated in June 2011:

-During 2011 the Central Bank has re-organised its internal banking supervision structures.

-The Central Bank has invested heavily in training all supervisory staff.

-A panel of risk advisors with specialist and industry expertise has been in operation since September 2010.