Pearse Doherty (Donegal South West, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

64. To ask the Minister for Finance the systems he has put in place to ensure that the structures of the relationship framework which determines the relationship between the bank and the executive are being observed by State backed banks and that the governance of the bank is fit-for-purpose. [40724/14]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

As the Deputy will be aware the Relationship Frameworks have been in place with the banks since March 2012. The Frameworks govern the relationship between the individual banks and the State and compliance with these agreements and each bank's various other commitments are monitored closely on both sides.

Officials from my Department meet with the senior management team in each of the banks regularly to be updated on a range of issues while these officials also maintain contact with other personnel in the banks to track events and decisions at the banks on a week to week basis.

As part of the banks' overall compliance procedures there is also regular internal reviewing of any legal agreements in place and any breaches must be reported to the Central Bank.

In addition  the banks are subject to the provisions of the Central Bank of Ireland's Corporate Governance Code for Credit Institutions and Insurance Undertakings ('the Central Bank Code') the code is available on the Central bank website at

. The code sets out minimum statutory requirements on how banks and insurance companies should organise the governance of their institutions. The requirements include:

- Boards must have a minimum of seven directors in major institutions and a minimum of five in all others;

- Requirements on the role and number of independent non-executive directors;

- Criteria for director independence and consideration of conflicts of interest;

- Limits on the number of directorships which directors may hold in financial and non financial companies to ensure they can comply with the expected demands of board membership of a credit institution or insurance company;

- Clear separation of the roles of Chairman and CEO;

- A prohibition on an individual who has been a CEO, director or senior manager during the previous five years from becoming Chairman of that institution;

- A requirement that board membership is reviewed at a minimum every three years;

- A requirement that boards set the risk appetite for the institution and monitor adherence to this on an ongoing basis; 

- Minimum requirements for board committees including audit and risk committees;

- A requirement for an annual confirmation of compliance to be submitted to the Central Bank.

Pearse Doherty (Donegal South West, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

65. To ask the Minister for Finance the possible implications for the State if a State backed bank is found to have committed fraud; and if he will make a statement on the matter. [40725/14]

Pearse Doherty (Donegal South West, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

66. To ask the Minister for Finance the timeframe and to what extent the activities of State backed banks are monitored to ensure they are operating in a way that will not leave the State open to financial or reputational damage. [40726/14]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I propose to take Questions Nos. 65 and 66 together.

The Deputy will be aware that each of the State backed banks takes steps to ensure proper risk management and governance structures are in place (supported by robust internal audit structures). Further details of these steps are set out in the annual reports of each of the State backed banks.  In addition to this, each of the State backed banks is subject to independent external audit review and ongoing regulatory oversight by the Central Bank of Ireland. Nothing arising from these internal or external processes has been brought to my attention to indicate a weakness at any of the banks which would materially increase the risk of a fraud being committed.

In relation to the Deputy's question on the possible implications for the State if a State backed bank was to be found to have committed fraud, I am not prepared to speculate on such a hypothetical matter, however, I would encourage any party who is aware of any incidences of fraud whether in the State backed banks or otherwise to report such fraud to An Garda Síochána.