Financial Regulator Matthew Elderfield has said the Central Bank is to set out new proposals on fitness and probity standards and warned that bank bosses failing these standards will be sacked.

In a speech at Trinity College in Dublin this morning, Mr Elderfield said the Central Bank would review the competence and track record of all executive and non-executive directors at State-supported banks.

Mr Elderfield was addressing the Foresight Business Group.

'We will use our new investigative powers, where appropriate, to ensure that the people in those positions meet the required level of fitness and probity,' Mr Elderfield said.

'Where they fall short of the required standards, we will not just remove individuals, but we will also, where appropriate, issue notices to prohibit individuals from continuing as directors,' he added.

On the review of all existing executive and non-executive directors at Government supported banks, he said: 'We will assess the incumbent directors against the new statutory standards, including, where it is relevant, their competence and track record in the period leading up to the financial crisis.'

He said that he would be writing to all bank directors to advise them that this new process will apply to anyone that plans to be in office by next January to allow them an opportunity to make their plans accordingly.