Watchdog pledges beefed-up unit to probe financial wrongdoings
The new head of financial regulation in Ireland is setting up a special investigations unit to probe alleged wrongdoings in the sector.
Laying out his stall yesterday, Matthew Elderfield said: "We need to move beyond the debate on rule-versus-principles-based regulation, where it's clear a judicious mix of the two is required, rather than swings between the extreme."
The former financial regulator of Bermuda signalled he planned to bring in an "assertive" regime, where the level of scrutiny financial institutions face depends on their size and risk. It will be backed by "the credible threat of enforcement", he said.
Mr Elderfield said financial firms and their leaders "need to be held much more accountable for their actions than has happened in the past, and be subject to tougher sanctions."
Still, he said: "We don't need to become an enforcement-led regulator who shoots first and asks questions later."
But he warned that "if we remain unconvinced by managements' plans we will be prepared to substitute our prudential judgment for their commercial one and say: Just do it."
Mr Elderfield has received board approval to hire an additional 150 people this year -- bringing his workforce to 520.
It is understood he is pushing to bring in up to a further 200 staff over next few years.
Sources suggested the watchdog wants to assign eight people to supervise each of the most important institutions -- including all retail banks and a number of large IFSC-based companies.
Before the crisis, two supervisory staff were essentially in charge of two firms.
Mr Elderfield sent a welcome signal to most operators in the IFSC, who had feared that they would be hit by the same level of scrutiny as systemically-important domestic banks in the future.
"A risk-based model means that we will not have a one-size-fits-all approach," he said.
"We need to be balanced and proportionate, depending on the risk of the sector or firm in question."
Meanwhile, Mr Elderfield said he will push for firms to move quickly to clear backlogs in handling overcharging cases.
"We will be writing to firms setting out deadlines for communicating with customers and providing compensation, making clear that enforcement action will follow on if our timelines are not met."