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LEGISLATION THAT WILL give the Central Bank more power to tackle individual bankers for wrongdoing was brought forward to Cabinet today.
Finance minister Paschal Donohoe confirmed recently that after much delay, the Central Bank (Individual Accountability Framework) Bill will establish the so-called “senior executive accountability regime” (SEAR).
The Bill aims to give greater powers to regulators to punish individual misconduct.
Minister Donohoe sought approval for the text of the Bill at a Cabinet meeting today.
Under the current administrative sanctions scheme, the Central Bank can only investigate and sanction individual executives and employees once it has proved that the company itself has broken the rules.
The new Bill seeks to break this link by introducing SEAR, which would force regulated firms to produce a statement of responsibility for each person working there, allowing the Central Bank to easily identify who is in charge when an issue arises in a particular area of the business.
Minister Donohoe has said that SEAR will apply to those in management roles such as chief operating officers, chief executives, members of the board and members of a partnership.
Firms in scope for this legislation will include credit institutions such as banks, insurance firms and investment firms.
SEAR was first mooted by the Central Bank in 2018 in a report on behaviour and culture in the financial services sector in the wake of the tracker mortgage scandal.
Last month, the Central Bank fined AIB and EBS almost €100 million for the role of the two banks in the tracker mortgage scandal.
The fines follow an enforcement investigation by the regulator that has been ongoing for five years.
AIB received a record fine of €83.3 million while EBS received a fine of €13.4 million.
The tracker mortgage controversy saw tens of thousands of customers being overcharged by their lenders when they were either denied a tracker rate they were entitled to, or charged the wrong rate of interest on their mortgage.
In many cases, the overcharging ran into tens of thousands of euro – in the worse cases people lost their homes as a direct result of the bank’s action.
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Been in power > 10 years and haven’t done it. Resisted at every turn legislation to stop gouging by insurance companies. Fine Gael and Fianna Fáil are not the ones to make this happen.
@Peter McGlynn: SF’s rise in the polls is making this happen
The worse case people lost their homes.!!.No such thing as banker accountability folks. Don’t be fooled by the the lies forthcoming.
@Paul Gorry: Micheal Martin in the pic at the top of the story, sure according to him there was no bank bailout and he’s our Taoiseach???
@Frank Cauldhame: now Frank are you making sense yet again.
@Paul Gorry: And Paschal beside him, elected on the 9th count without reaching the quota and appointed a Minister. What a great wee country we live in.
@Frank Cauldhame: Not forgetting the elephant in the room Frank. Sir Stephen Donnelly brought in by ff to man the health service to no avail.
@Paul Gorry: Yes Paul, Stephen Donnelly was elected on the 15th count without reaching the quota and was also appointed a Minister.
@Frank Cauldhame: jayus i knew that Frank but actually looking at it in writing makes feel worser.
@Frank Cauldhame:and all the shinners TDs elected on the first counts and they couldn’t get into government
Too little too late for those defrauded by banks and their directors who engaged in tracker mortgage fraud. Fine Gael unwilling and unable to be tough on banks and white collar crime.
@Irish Cottage Rental: Sure one of their own is head of the Bankers federation.
That headline gave me a good laugh! Definition of oxymoron – “Banker Accounability”.
To little too late
20 years too late.
The purpose of fining them is what exactly? Ultimately it’s the end user that foots that bill. Pointless.
A reasonable start having this legislation. But Europeans and British banks led the charge into danger territory last time so é. U. Regulation. And executive sanction may also be required…
What accountability!!!
@Mairead Conroy: bit late considering the horse has already bolted.
have your say