Pearse Doherty (Donegal South West, Sinn Fein)
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220. To ask the Minister for Finance if he is concerned at the criticism of the former management of Halifax Bank of Scotland by the British Parliamentary Commission on banking standards in its fourth report on 5 April 2013; and if he will confirm that he has confidence in a person (details supplie) of Bank of Ireland who previously occupied a senior position in HBOS. [18475/13]

Michael Noonan (Limerick City, Fine Gael)
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I can confirm to the Deputy that nothing has been brought to my attention to suggest that the individual referred to is not a fit and proper person to fill the role of Governor of the Bank of Ireland. In advance of the Bank’s Annual General Court scheduled to be held tomorrow, 24th April, I am entitled to vote on a number of Resolutions attaching to the stock held by the State, one of which relates to the election and re-election of the Bank’s Directors, including the Governor. I can confirm for the Deputy that I will be voting in favour of this Resolution.

Pearse Doherty (Donegal South West, Sinn Fein)
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221. To ask the Minister for Finance if he will outline any relevant lessons and recommendations for the Irish banking sector, following the recent fourth report by the British Parliamentary Commission on banking standards on 5 April 2013. [18476/13]

Michael Noonan (Limerick City, Fine Gael)
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The recent Fourth Report of the House of Lords / House of Commons Parliamentary Commission on Banking Standards examines why HBOS failed and what the failure says about the culture and standards in UK Banking. There are clearly lessons to be learnt from this analysis of the decline of HBOS particularly as the Report makes it clear that to an extent its dramatic demise was ‘an accident waiting to happen’ and it in this context senior management and the Financial Services Authority failed to follow through on the implications of its high risk growth strategy despite the fact that this was signalled as early as 2004.

The Report clearly highlights failures at a number of levels – the senior management of the bank, the internal risk control, at the regulatory level and within the financial markets. As set out in the Report in relation to the HBOS failure whilst structural and regulatory reform at national and European level are key to future financial stability it does not diminish the need for appropriate management and supervision of traditional banking activities. The case of HBOS also highlights that prudential supervisors cannot rely on financial markets to do their work for them as neither the stakeholders nor rating agencies exerted the effective pressure that might have acted as a constraint upon the flawed strategy of the bank.

As the Deputy is aware, the situation in relation to the Irish banking system has been the subject of reports and analysis by Honohan, Nyberg and Regling and Watson. The Government continues the process of addressing the regulatory failures of the past. This week the Central Bank Supervision and Enforcement Bill will be debated at Committee Stage. This Bill further enhances the supervisory and regulatory framework under which financial institutions in Ireland will operate into the future. Separately this will be complemented by the enhancement of the supervisory framework at the EU level, and as the Deputy will be aware, much progress has been made on this agenda during the course of Ireland’s Presidency of the European Union.