At the presentation of its annual report for 2008, the Financial Services Consultative Industry Panel, which was established five years ago as an independent regulation watchdog, said corporate governance in the Irish banking sector has been found “severely wanting”.
Panel chairman David Went, the former chief executive of Irish Life & Permanent, said while the Irish and international financial systems have suffered a systemic shock over the past year, regulatory standards in the banking sector here and abroad “have proved inadequate to deal with the unprecedented turmoil that has emerged”.
He said: “It is also clear regulatory oversight of governance in Ireland was inadequate.
“The wider financial system in Ireland and internationally has suffered a loss of confidence among customers and investors. It is vitally important, for the good of this economy, that there is a high level of confidence in our own financial system.”
With regard to proposed changes to the financial regulation structure, including the proposed amalgamation of the Financial Regulator with the Central Bank into the Central Bank of Ireland Commission, the panel said “a blunt ‘one size fits all’ approach is not appropriate for the different sectors of financial services and must be avoided”.
It said getting the best quality of regulatory staff was “far more important” than the structure in which they operate.
It said in its report: “The recent government announcement of proposed changes in the structure of financial regulation in Ireland was greeted, to some extent, as if changing the structure meant that the job was done.”