Financial Regulator to vet senior executives

Recent banking scandals has forced regulator IFSRA to vet future senior executives hired in the financial services industry, it emerged tonight.

Recent banking scandals has forced regulator IFSRA to vet future senior executives hired in the financial services industry, it emerged tonight.

The watchdog is to publish proposals for a comprehensive framework of standards for testing the competence of directors and managers of financial services firms.

IFSRA chief Dr Liam O’Reilly said: “If there is proven misbehaviour against people in the industry or those trying to get into the industry, our intention is to make sure that those people are taken out or stopped coming in.

“In addition to looking at the individual’s personal record, we look also at whether they are clearly committed to complying with regulations in their firm.

“This would include playing a part in supporting and rewarding staff within a firm for taking an ethical approach to their work.”

Dr O’Reilly was speaking to the Oireachtas Committee on Finance today where he gave a progress report on action AIB bank is taking in rectifying controls to avoid recent overcharging scandals.

The bank has introduced a centralised register of all charges levied on products and has strengthened its internal audit procedures.

It is also considering disciplinary actions against individuals found culpable and will liaise with IFSRA on the matter.

The bank has already refunded €34.2m including €25.6m for overcharging on foreign exchange transactions.

IFSRA said at least seven opportunities arose between 1998 and 2003 for certain staff and management to inform it of discrepancies.

Dr O’Reilly said: “We’re determined that in going forward we have an industry that has a proper culture and a proper attitude to its customers.

“There has been a sea change at board level and executive level in AIB.”

IFSRA published an interim report of its investigations last July and a final Report last month on AIB on foreign exchange and other charging issues.

Dr O’Reilly said he “wouldn’t disagree” with an assertion by Joan Burton that a "cover-up" was involved.

Committee chairman Sean Fleming said that Dr O’Reilly was “speaking to a doubting Thomas public” in relation to standards in the banking sector.

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