Mr Lenihan was before the select committee on finance and the public service yesterday, discussing amendments to the Central Bank Reform Bill – the first of a three-part legislative programme to create the new integrated financial regulation system, which will ultimately see the amalgamation of the Central Bank and Financial Regulator’s office.
The minister’s appearance followed on from that of Central Bank governor Patrick Honohan earlier in the week, – where Mr Honohan questioned the actual need for the Government’s planned commission of investigation into the banking meltdown, on the back of the comprehensive findings of his own recent report and that of international finance experts, Klaus Regling and Max Watson.
Mr Honohan suggested to the committee last Tuesday that the investigation could be parked until its aims were fully fleshed out. Labour’s finance spokesperson Joan Burton yesterday suggested such a course of action could save the taxpayer “a lot of money and frustration” and added that there was already mounting concern over the commission’s potential costs and duration. However, Mr Lenihan gave no indication that the Government would change its mind but did say he was open to all-party talks about how best to carry out the process and that a conclusion should be reached swiftly.
In his defence of the commission of investigation going ahead, Mr Lenihan said Mr Honohan’s report had been chiefly about the regulatory system within the Central Bank and its crisis management levels at the height of the financial crisis whereas more general questions regarding mortgage brokers and the banks themselves were raised in the secondary report – which warrant further investigation.
Elsewhere in yesterday’s debate about the bill Mr Lenihan said the new strategic review into the Credit Union movement is scheduled to be completed by next March.
Mr Lenihan added that the new Central Bank Commission will have “sufficient flexibility” to differentiate between domestic banks and overseas financial institutions based in the IFSC. He also said that the commission would not, initially, come under the Freedom of Information Act given the sensitivity of information it holds, but this could be subject to review.