Finance Minister Brian Lenihan has told the Dáil that new legislation on financial regulation being introduced will include a section on 'fitness and probity'.
He said the Central Bank Reform Bill would provide the Financial Regulator with new powers to ensure that people holding key positions in financial institutions are 'fit and proper' for their roles.
Mr Lenihan said that we had seen 'as late as yesterday, the devastating effects of irresponsible and incompetent behaviour at senior levels in financial institutions'.
The Bill includes wide-ranging powers for the regulator to suspend people in some positions in banks if he has reason to suspect they are not a fit and proper person for the role. Bank staff performing some functions can also be suspended pending an investigation into whether they are fit for their role.
The Minister was speaking on the second stage of the Central Bank Reform Bill, which will set up a new integrated structure run by a new board called the Central Bank Commission.
It will be responsible at for the stability of the financial system overall, the regulation of financial institutions, and the protection of consumer interests. The Minister said the Central Bank's statutory role of promoting the development of the financial services industry will be removed.
The Bill also transfers responsibility for consumer information and education to the National Consumer Agency. The Minister said that while the post of Consumer Director and the statutory Consultative Consumer panel will be abolished, the bank would have 'a sharper focus' for regulating how financial institutions deal with their customers.
