It's time to enforce rules so customers get a fair deal
The regulations were thrown out completely for the banks at great expense to the public.
Light-touch regulation at the banks, and that's how it all began. Financial institutions try to work within the regulations, but sometimes they go a bit too far and bend the rules to breaking point and beyond. The Central Bank is there to make sure they toe the line. There's a fine line between compliance and what constitutes a breach. The end justifies the means if you can afford the financial sanctions that the system might impose. Only two have been wound up and that took six years.
The Central Bank has Structural, Systemic and Prudential Regulations to vet, monitor, and control financial institutions and make sure our financial system works. There are public interest issues too as the system doesn't work without public confidence. In spite of all it costs to run it, the system didn't work when we needed it.
The early warning system that systemic control provides was turned off when the financial crisis hit. Light-touch regulation is what stopped the Prudential Regulations from working. Prudential Regulations monitor what the institutions are doing to make sure they stay on track.