| 10.6°C Dublin

New regulator in call for stronger enforcing powers

The new Financial Regulator, Matthew Elderfield, has pledged tough supervision of the banking and financial sector after a series of failings aided the collapse of the economy.

Mr Elderfield said that he would set up a division to enforce special investigative unit, noting there needed to be "assertive risk-based regulation underpinned by a credible threat of enforcement".

However, he said that the agency would require more stringent powers in order to enforce the rules.

"It is already clear to me that we need to undertake a fundamental overhaul of the regulatory model for financial services in Ireland," he said.

Mr Elderfield said the banks would need to comply with the 12-month moratorium on legal actions against home owners in arrears on their mortgages.

Businesses are being urged to act immediately before the regulator gets in touch with them and "move more quickly to clear backlogs in handling overcharging cases".

The regulator said there had been "fundamental failings in corporate governance" in financial institutions in this country and plans tougher fitness requirements and guidelines on remuneration and risk trading.

"Those with a poor track record should not expect to receive the benefit of doubt from me or my staff when the best approach to addressing a risk is a point of contention between us," he said.

The watchdog does not currently have any statutory powers in the area of fitness and probity of top bankers -- a fact that is likely to have shocked its new boss.

"Ireland is competing as a premier financial services centre. But you can't referee a Premier League match with one linesman and no red card in your pocket," said Elderfield.

"It's important that we have the resources and powers needed to do the job."

Mr Elderfield, who previously headed the Bermuda Monetary Authority, will also have a head of policy and risk, which should help Ireland influence debates on future capital and liquidity requirements.

"The recapitalisation exercise will help draw a line under the banking crisis and help get credit flowing again," he said.

"It isn't for the benefit of the banks or their management, but is an essential step for the recovery of the finances of Irish business and Irish households by improving confidence in the economy."