Elderfield says laws must be stronger on white-collar crime
Regulator warns of need to learn lessons of bank collapse
Matthew Elderfield used what is likely to prove his last appearance before the Dail's public spending watchdog to tell TDs that laws aimed at cracking down on white-collar crime are not tough enough.
The outgoing Financial Regulator reiterated a plea for a review of the system for tackling financial crimes. He added that there should be a public debate on boosting the laws dealing with white-collar crime after claiming that the current legislation in this area was not fit for purpose.
Mr Elderfield (47), who leaves his post in October to take up a job with Lloyds Bank in London, said a "wise person" – such as a retired judge, a former Attorney General or the Public Accounts Committee (PAC) itself – should conduct a review on how to more effectively tackle white-collar crime.
"We've done a good job in enforcement against firms but I wish we had done more on individuals and I think the system could do better on that," he told the PAC.
Asked if he believed that the current laws dealing with individuals suspected of white-collar crime were up to scratch, he replied: "No." He continued: "I think in due course we'll be able to take some actions against individuals – and we are pursing a couple of cases – but I wish it had happened faster.
"The white-collar set- up in and around capabilities, resources, powers, constitutional interaction – I don't think in the round that it's working sufficiently well."
Mr Elderfield said questions needed to be asked about the resourcing capabilities of the gardai and the Office of the Director of Corporate Enforcement to take on the number of cases that may be required.
He also warned the TDs to be "wary of amnesia" and stressed that it was important to maintain the improvements made in supervision.
"It's also especially important to be vigilant against backsliding and attempts to compromise the independence or dilute the diligence of regulation, especially when times start to get good," he said.
"It's when the next bubble comes. That's the moment of risk. Everyone is making lots of money. The regulators are an irritant. If people are really complaining about it, what are their motives?"
Mr Elderfield said that if Ireland had had a process in place for dealing with failing banks on the night of the bank guarantee, the then Government would have known that Anglo Irish Bank was insolvent.
The deputy governor of the Central Bank also told TDs that the country must "steel ourselves for a significant increase in repossessions".
He said it would be surprising if the repossession rate remained at current low levels and that there would be more voluntary surrenders. Mr Elderfield believed the banks would hit their targets on dealing with mortgage arrears, but the arrears level was moving up.