High legal burden to prosecute individual bankers

Finding individual bankers guilty of reckless lending could be too cumbersome to prosecute with new laws, legal experts have said.

Members at the Law Reform Commission (LRC), led by Justice Mary Laffoy, told the Oireachtas Finance Committee that tackling "egregiously reckless risk-taking" remains problematic.

The LRC was appearing before the committee to outline its recommendations for a white-collar crime agency.

Amending legislation such as the Theft and Fraud Acts 2001 could work rather than creating new standalone offences.

Sinn Féin finance spokesman Pearse Doherty said he could not understand why reckless behaviour of individual bankers could not be prosecuted with new laws, such as is the case in the UK or Australia.

LRC Commissioner Raymond Byrne said the UK appeared to put a very high burden of proof on the prosecution to establish that reckless behaviour by bankers caused banking failures.

Mr Byrne said that Australian prosecutions focused on intentionally bad behaviour to prosecute, rather than relying on the subjectivity of reckless lending.

Commissioner Tom O'Malley said there was difficulty in establishing a balance between taking risks in the name of legitimate business and matters that should be considered as unlawful.

The LRC said it wanted a statutory corporate crime agency to be established.

The agency would be separate from the proposed Corporate Enforcement Authority which is due to replace the Office of the Director of Corporate Enforcement (ODCE).

The Corporate Enforcement Authority would only deal with company law.

A white-collar agency could investigate corporate crime that falls outside the remit of regulators such as the Central Bank, the Competition and Consumer Protection Commission, ComReg, or the proposed Corporate Enforcement Authority, the LRC said.

Corporate offences such as false accounting and other similar offences are outside the scope of the regulators, the LRC said. A one-stop shop agency akin to the role played by the Criminal Assets Bureau is needed to investigate such offences, it said.

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