Watchdog calls for heavier fines to combat rogue firms
The financial regulator has warned financial institutions here to expect tough new rules underpinned by a "credible threat of enforcement".
Matthew Elderfield also told a conference in Dublin yesterday that severe breaches of financial codes should attract a heavier fine than the current €5m maximum that can be imposed.
Mr Elderfield, who took up the role of head of financial supervision at the Central Bank in January, was speaking yesterday at an event hosted by Financial Services Ireland.
"It's clear that we need a fundamental overhaul of the regulatory model for financial services in Ireland," he said, adding that there had been some "over-dominant CEOs" in the Irish banking sector in the past combined with serious breaches of codes.
"There is an issue about improving accountability. Standards weren't breached at the margin, but breached in a serious manner." There were "serious failings" in corporate governance, he noted.
The biggest fine to date by the regulator, levied in 2008, was incurred by Sean Quinn's insurance group. It paid a €3.25m penalty for failing to notify the regulator that the insurance division had made €288m in loans to other group companies. Mr Quinn was also personally fined €200,000.
Mr Elderfield told the audience that there would be "assertive, risk-based regulation" and that he would also push for more of the rising cost of regulation to be paid for by the industry, rather than the case at the moment where the taxpayer foots half the bill.
About 400 people are now employed to regulate the Irish financial services sector, and this could rise to 700.
The regulator also claimed that there was now a "clear, credible and swift path" to restoring the nation's banking system.