DIFFERENCES over the future role of the Central Bank have emerged within the group set up to advise the Government on the establishment of a single financial regulator.
An attempt to reach a compromise will be made at a meeting next Monday although it is thought that further discussions may be required.
The group was due to report back to the Tanaiste and Minister for Enterprise, Trade and Employment, Ms Harney, and the Minister for Finance, Mr McCreevy, by the end of February, but is not now expected to do so until next month.
Some members are in favour of the new authority being completely independent of the Central Bank, while others have spoken in favour of the Central Bank retaining a role.
The chairman of the committee, Mr Michael McDowell SC, will attempt to seek a compromise on Monday. He was not available for comment yesterday.
Two committee members, the representative of the Department of Enterprise, Trade and Employment, Mr John Corcoran, and the Director of Consumer Affairs, Ms Carmel Foley, are understood to be in favour of a regulator completely independent of the Central Bank.
The representative of the Attorney General's office has expressed concern about this idea, while an official from the Taoiseach's department has voiced the fear that foreign banks based in the Irish Financial Services Centre (IFSC) may not welcome a regulator which has no links with the Central Bank.
There has been some discussion about the Central Bank "overseeing" the new regulator and the group has spent time considering the idea that it could operate as a subsidiary of the Central Bank. The Department of Finance has yet to speak in favour of any of the proposals and its intervention could be crucial.
Senior officials from the Central Bank have made detailed submissions to the group and have pointed out that the bank's staff have built up expertise in financial regulation over many years.
All members of the group have accepted this and the report to the Government is likely to recommend that whatever regulator is set up, it will have a large complement of Central Bank staff.
The union representing Central Bank staff, MSF, has already come out against the idea that the regulator would be independent of the bank. It has urged that a subsidiary of the Central Bank - with consumer representation - be considered instead.
Central Bank governor Mr Maurice O'Connell has previously stated that the separation of the functions of supervision and responsibility for the stability of the banking system is not an issue to be "treated lightly".
The terms of reference for the group charge it with examining whether existing regulators, like the Central Bank, will continue "to have functions in relation to the regulation of the financial services sector".
The other members of the group are Mr Joe Moran, the former chief executive of ESB, and Mr Maurice Tempany, former president of the Institute of Chartered Accountants.
