Regulator invites input on rules for financial institutions

The Financial Regulator is today looking for input as he prepares new rules for banks and insurance companies.

Matthew Elderfield is publishing a consultation paper, as part of his wider strategy to update Ireland's regulatory framework for the sector.

Reform of the banking system has been top of Matthew Elderfield's agenda since he took up his post last year.

Today's step on that road outlines proposals on the standards that would, in future, be expected of the boards of directors of banks and insurers.

They include a minimum of five directors on the board, limits on the number of directorships members can hold, a clear separation of the roles of chairman and chief executive, and also criteria for director independence and consideration of conflicts of interest.

They also call for a financial institution to submit a confirmation of compliance to the Central Bank every year.

Under the proposals, anyone who does not comply with the standards would face sanctions.

The Regulator said the reforms should be broadened to include the funds industry, investment firms and credit unions

“The enhancement of corporate governance together with more intrusive supervision and a credible threat of enforcement will contribute to the improvement of the resilience of the Irish financial sector,” the Regulator said in a statement.

The Regulator said it is widely accepted one of the causes of the international financial crisis was inadequate oversight.

Matthew Elderfield said the new rules should be set the minimum standards for senior executives.

The paper is open to submissions from any interested parties until June 30.