Willie Penrose (Longford-Westmeath, Labour)
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80. To ask the Minister for Finance if consideration is being given to the introduction of legislation similar to that which has been introduced by the Financial Conduct Authority in the United Kingdom whereby it is proposed to hold persons accountable for bank failure by means of a presumption of responsibility rule, which requires senior managers to demonstrate, where a firm is guilty of misconduct, that they took such steps as a person in their position could reasonably be expected to take to avoid it happening; and if he will make a statement on the matter. [15085/15]

Michael Noonan (Limerick City, Fine Gael)
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In 2011 the new Fitness and Probity regime was rolled out by the Central Bank in accordance with the provisions of the Central Bank Reform Act 2010. The regime provides for new powers to be exercised by the Central Bank to ensure the fitness and probity of nominees to key positions within financial service providers and of key office-holders within those providers. 

The Central Bank has published non-statutory guidance to assist regulated financial service providers in complying with their obligations under Section 21 of the Central Bank Reform Act 2010 in relation to the Fitness and Probity Standards.  The guidance outlines the steps which the Central Bank expects regulated financial service providers to take in order to satisfy themselves on reasonable grounds that individuals performing controlled functions, including pre-approval controlled functions, are in compliance with the Fitness and Probity Standards. 

The operation of the Single Supervisory Mechanism now provides that the task of assessing the fitness and probity of key individuals is shared with the European Central Bank in respect of all significant credit institutions including all of our main banks. 

There are no current proposals from the Central Bank or the SSM for a Presumption of Responsibility provision.  However, taking account of the conclusions that emerge from the Banking Inquiry my Department will review any issues arising in respect of the overall regulatory framework.  

For the Deputy's information, the UK Banking Reform Act 2013 replaced the Approved Persons Regime for banks, building societies and credit unions with a new regulatory framework for individuals.  The new framework comprises two regimes, a 'Senior Managers Regime' and a 'Certification Regime', which aim to encourage individuals to take greater responsibility for their actions and make it easier for both firms and the regulators to hold individuals to account.

The UK Financial Conduct Authority (FCA) has also announced that it is consulting on further, more detailed guidance on how the FCA will apply the Presumption of Responsibility.  Under the Presumption of Responsibility, when a relevant/authorised firm contravenes a relevant requirement then the Senior Manager with responsibility for the management of any of the firm's activities in relation to which the contravention occurred is guilty of misconduct, unless they satisfy the relevant regulator that they took such steps as a person in their position could reasonably be expected to take to avoid the contravention occurring or continuing. The proposed guidance sets out the circumstances in which the FCA would seek to apply the presumption of responsibility; how the FCA would apply it and the steps that a Senior Manager should take in order to rebut the presumption of responsibility.