Central Bank to beef up its powers

FINANCE MINISTER Michael Noonan has published new legislation proposals aimed at strengthening the Central Bank’s regulatory powers, including granting protection for ‘whistleblowers’ and fines of up to €10 million.

The Central Bank (Supervision and Enforcement) Bill 2011 — which is due to come before the Dáil when it reconvenes in the autumn — is being seen as a direct response to the regulatory failures of the recent financial and banking sector crisis. Its publication, according to Mr Noonan, “represents a significant further step in the reform of financial regulation in Ireland.”

“The changes introduced by the bill will underpin an assertive, risk-based model of regulation supported by a credible threat of enforcement,” the minister added.

It also meets a requirement of the country’s EU/IMF rescue agreement for the introduction of legislation aimed at strengthening the supervision and enforcement powers of the Central Bank.

Amongst the proposed new powers are an increase in maximum fines for companies or individuals who breach regulations (from €5m to €10m for companies and from €500,000 to €1m for individuals); full protection for financial whistleblowers; the power to intervene in financial institutions in serious circumstances — including the power to suspend certain activities of companies — and permission to collect information in co-operation with overseas counterparts.

Also, where a regulated financial services provider is guilty of an offence or contravention under financial services legislation, and where they have been enriched unjustly in doing so, the Central Bank will have the facility to apply to the courts for a restitution order.