Written answers

Thursday, 24 November 2016

Department of Finance

Financial Services Regulation

Photo of Mick WallaceMick Wallace (Wexford, Independent)
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73. To ask the Minister for Finance his views on a recent new complaints process and complex fee refund compensation scheme announcement for business customers that were part of a bank's global restructuring group (details supplied); and the access that customers that were part of a group will have to the complaints process and compensation fund. [36725/16]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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The Tomlinson report dealt with the lending practices of UK banks to Small and Medium Sized Enterprises (SMEs) and it alleged that a division of Royal Bank of Scotland (RBS), the Global Restructuring Group, was guilty of "systematic and institutional behaviour" in artificially distressing otherwise viable businesses. Following this report, the UK's Financial Conduct Authority (FCA) appointed Promontory Financial Group to further investigate these allegations.  Promontory's work, along with the involvement of the FCA, led RBS to recently announce redress for certain SME customers of RBS's Global Restructuring Group.  The final details of the redress scheme remain to be agreed with the FCA.

As I have previously answered, Ulster Bank Ireland Limited undertook an independent review into the relevance of these allegations to its corresponding division, namely the Global Restructuring Group Ireland (GRGI).  On the 19th December 2014, Ulster Bank published the findings of the independent review by Mahon Hayes Curran into practices at GRGI.  The investigation found no evidence to support the allegations and suggested that GRGI's driving policy was to manage its customers through the cycle, supporting them where possible to return them to viability.

The Central Bank is the statutory body with responsibility for the investigation of any such allegations in an Irish context and I consider this as a matter properly for the Central Bank.  I am confident that legislative changes since the financial crisis have equipped the Central Bank with an array of investigative, regulatory and enforcement powers to ensure that regulated financial service providers adhere to the requirements of financial services legislation.

These changes include significantly enhanced powers for the Central Bank to gather information under the Central Bank (Supervision and Enforcement) Act 2013 which broadened the Banks' information gathering and authorised officer powers.  It is evident that the Central Bank is properly undertaking its enforcement role by the recent sizeable settlements in enforcement cases.

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