The Irish financial regulator should benchmark its inspection processes against those of other European regulators, the Government's spending watchdog advised yesterday.
In his first report into the Irish Financial Services Regulatory Authority, published yesterday, the Comptroller and Auditor General, John Purcell, also advised it to commission an independent report into the adequacy of its approach to inspecting financial services providers.
The regulator currently ranks financial services providers in terms of risk and then uses this risk rating to determine the level of supervision required.
Mr Purcell reported that the regulator could enhance this approach by formally defining risk categories and specifying the supervisory stance appropriate for each category.
Although external auditors of all financial services providers are obliged to make certain returns to the financial regulator, an analysis of 80 case files carried out by Mr Purcell revealed that the required returns were only provided in relation to banks and building societies.
However, he noted that steps have been taken to remedy this situation.
A redesign of the regulator's website was also called for in the report. The site should enable financial services providers to access the most up-to-date information on rules and operational guidance.
Mr Purcell acknowledged that the regulator has made this a key priority.
Financial services providers should also be provided with more timely notice of the annual levies they are required to pay to the financial regulator. These levies fluctuate each year and, between 2004 and 2006, companies were not informed of levies due until July of each year, making it difficult to do their own annual budgeting.
In a statement issued yesterday, the regulator accepted that it could improve its efficiency in a number of areas, and said that many of Mr Purcell's recommendations were being addressed as part of its Strategic Plan for 2007-2009.
The regulator also pointed out that the overall results of the study were positive.
