The Central Bank has told the Government that the law needs to be strengthened to prevent companies providing false or misleading information to regulators.

In a letter written to Minister for Finance Michael Noonan, which has been released to Fianna Fáil under Freedom of Information, the bank warned there were no consequences for people who provide false or misleading information.

The Central Bank's job is to police the financial sector and much of its work relies on seeking information from companies to ensure they are not breaking rules.

But very little happens when those giving information are lying.

Last August the Central Bank's then governor Patrick Honohan wrote to Mr Noonan.

Some of that correspondence was redacted, however, the full version has now been issued to Fianna Fáil's finance spokesman Michael McGrath.

In the correspondence Mr Honohan said the bank had been provided with "false or misleading information" by companies.

This was often designed to cover "serious shortcomings or inadequacies", but he said there were "no legal consequences" that the Central Bank could take.

He said this allowed "individuals to act without responsibility for their actions of lying."

And he called for the loophole to be closed.

The Central Bank has declined to comment on the correspondence.

However, it is understood the bank anticipates rules will be tightened this year with the introduction of new measures under Solvency II rules, which covers the insurance industry.

However, Mr Honohan's letter also called for a change in legislation regarding the Central Bank Act to strengthen its powers further.

Fianna Fáil's Michael McGrath said the loophole left Irish consumers exposed and called for action to be taken to ensure the public is not exposed.

A spokesperson for the Department of Finance said: “The Department has, based on the on the report received from the Central Bank, set up a group to examine the issues raised by the Bank.

"This group is examining in detail the points raised in the report and to determine what actions may need to be taken in conjunction with the Central Bank.”