Written answers

Tuesday, 5 February 2013

Department of Finance

Banking Licence Breaches

Photo of Pearse DohertyPearse Doherty (Donegal South West, Sinn Fein)
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To ask the Minister for Finance further to Parliamentary Question No. 275 of 29 January 2013, if he will outline the nature of the breach or breaches referred to. [5613/13]

Photo of Pearse DohertyPearse Doherty (Donegal South West, Sinn Fein)
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To ask the Minister for Finance further to Parliamentary Question No. 275 of 29 January 2013, if he will confirm if the breach or breaches to the terms of the banking licence have prevented or hindered Irish Bank Resolution Corporation in pursuing its objectives. [5616/13]

Photo of Pearse DohertyPearse Doherty (Donegal South West, Sinn Fein)
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To ask the Minister for Finance further to Parliamentary Question No. 275 of 29 January 2013, if he will detail the actions taken by Irish Bank Resolution Corporation in response to the breach or breaches. [5617/13]

Photo of Pearse DohertyPearse Doherty (Donegal South West, Sinn Fein)
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To ask the Minister for Finance further to Parliamentary Question No. 275 of 29 January 2013, if he will confirm if the European Central Bank has been made aware of the breach or breaches at Irish Bank Resolution Corporation; and if so, if he will provide the response of the ECB to the breach or breaches. [5618/13]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 271 and 274 to 276, inclusive, together.

I have been advised that as disclosed previously in IBRC’s published account and as the organisation in wind down, IBRC is not in full compliance with Irish regulatory requirements. The Central Bank of Ireland, as the primary regulator of IBRC, is fully aware of this. Any breaches of certain technical requirements that apply to credit institutions do not impinge on the organisation in achieving its wind down objectives.

Page 18 of the Bank’s 2012 Interim Report clearly discloses the following under ‘Regulatory Compliance Risk’:

“Regulatory compliance risk primarily arises from a failure or inability to comply fully with the laws, regulations, standards or codes applicable specifically to regulated entities in the financial services industry. The Bank continues to operate as a regulated entity and, as such, is therefore subject to certain minimum prudential and other regulatory requirements. At 30 June 2012, the Bank is not in full compliance with all Irish regulatory requirements. While the Bank ensures that the relevant Authorities are kept fully informed in this regard, non-compliance may result in the Group being subject to regulatory sanctions, material financial loss and/or loss of reputation.”

Photo of Pearse DohertyPearse Doherty (Donegal South West, Sinn Fein)
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To ask the Minister for Finance further to Parliamentary Question No. 275 of 29 January 2013, if he will confirm the number of banks in the State operating under licences granted by the Central Bank of Ireland, that have been in breach of the terms of their banking licence since 1 January 2012. [5614/13]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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The Central Bank of Ireland has informed me that under Section 33AK of the Central Bank Act 1942, the Bank is restricted in its ability to disclose details of the supervision of individual credit institutions, and cannot therefore provide details of any breaches of the its licensing and supervision requirements. The Central Bank has confirmed that in the event of a breach occurring, action would be taken to ensure that the credit institution remediates the cause of the breach immediately and to ensure that such a breach does not recur. Depending on the nature of the breach, further Central Bank action would be considered, including possible enforcement action and other regulatory sanction.

Photo of Pearse DohertyPearse Doherty (Donegal South West, Sinn Fein)
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To ask the Minister for Finance further to Parliamentary Question No. 275 of 29 January 2013, if he will confirm when the Central Bank of Ireland first became aware of breaches at Irish Bank Resolution Corporation; and if he will detail the actions the Central Bank of Ireland has taken in response to the breach or breaches. [5615/13]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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The Central Bank has informed me that in the context of efforts to address the difficulties in the Irish banking sector, it was made aware of the challenges faced by institutions to maintain minimum regulatory standards. The breaches were first reported in IBRC’s Interim 2010 accounts which cover the first six months of that year. In this regard and given Irish Bank Resolution Corporation’s balance sheet structure of a wind down entity and primary reliance on central bank funding to fund its assets, it is not possible for that entity to comply with certain minimum requirements as prescribed by the Central Bank of Ireland.

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