Sorca Clarke (Longford-Westmeath, Sinn Fein)
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270. To ask the Minister for Finance if the senior executive accountability regime to deliver heightened accountability with the banking system as outlined in the Programme for Government has been established; if a report has been published; and if he will make a statement on the matter. [16391/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Senior Executive Accountability Regime (SEAR) is a key element of the Central Bank (Individual Accountability Framework) Bill which will drive positive changes in terms of culture, greater delegation of responsibilities, and enhanced accountability while simplifying the taking of sanctions against individuals who fail in their financial sector roles.

The General Scheme of the Central Bank (Individual Accountability Framework) Bill was approved by Government and published on the Department's website in July 2021;

(www.gov.ie/en/press-release/4f16e-minister-donohoe-secures-agreement-to-draft-central-bank-individual-accountability-framework-bill).

My officials are working closely with the Office of the Parliamentary Counsel on the drafting of the Bill, which is at an advanced stage. It is a complex piece of legislation which has had to be extensively adapted to take account of the Supreme Court's decision inZalewski v. Adjudication Officer and Others.

The General Scheme is also currently undergoing Pre-Legislative Scrutiny by the Joint Oireachtas Committee on Finance, Public Expenditure and Reform, and Taoiseach and I await the report from the Committee which I hope to see soon.

The Bill will provide greater levels of accountability, which will lead to better outcomes across the sector:

- Customers will benefit from financial service providers being fully accountable for the service and advice they provide;

- Employees of financial institutions will benefit from greater clarity as to their role and responsibilities, and will be empowered to speak up when they see failings;

- Firms and their shareholders will benefit through having senior executives personally accountable for their actions and inaction; and

- The wider economy and society will benefit from a more stable financial system by reducing the scope for reckless decisions.

I have agreed that SEAR will initially apply to banks, insurance companies, and other sectors that have a high degree of interaction with retail consumers including:

- Credit institutions (excluding credit unions);

- Insurance undertakings (excluding reinsurance undertakings, captive (re)insurance undertakings and Insurance Special Purpose Vehicles);

- Investment firms which underwrite on a firm commitment basis and/or deal on own account and/or are authorised to hold client monies/assets; and

- Third country branches of the above.

Accountability of senior staff in these sectors will lead to better outcomes for customers.

SEAR will provide a regime with the following features:

- Specific senior executives in firms will be designated as carrying out Senior Executive Functions;

- Firms will be required to provide Statements of Responsibilities to the Central Bank which will clearly set out the roles and responsibilities of each senior executive;

- Firms will also have to produce Management Responsibility Maps documenting key management and governance arrangements in a comprehensive and accessible way;

The effect of these measures will be to ensure that there is absolute clarity as to who is responsible for what. This should foster a culture of personal accountability across the sector.

Restoring public trust in the financial sector is essential, not least for the sector itself. The Central Bank (Individual Accountability Framework) Bill will provide an effective framework, and will help to reassure the public that meaningful cultural change is underway.

The aim of this regime is to allocate responsibility and prevent misdemeanour, rather than being punitive. This framework is designed to improve governance and the management of risk and outcomes for consumers.

I intend to bring the Bill to Government for approval to publish it as soon as possible.