SUBSTANTIVE LEGISLATION to allow for the merger of the independent Financial Regulator’s office with the Central Bank was introduced in the Dáil last night by Minister for Finance Brian Lenihan.

The Central Bank Reform Bill is the first of three pieces of legislation to “create a new fully integrated structure for financial regulation” to replace the existing Central Bank and Financial Services Authority of Ireland, he said.

“A second Bill, to be brought before the House in the autumn, will enhance the powers and functions of the restructured Central Bank in relation to: the prudential supervision of individual financial institutions; the conduct of business, including the protection of consumer interest and the overall stability of the financial system.”

He said “a third Bill will consolidate the existing statutory arrangements for the Central Bank and financial regulation in the State”.

The Minister said: “I believe public confidence in the system of regulation we have put in place is growing by the day, and I believe that the work of Nama in cleaning up the banks’ balance sheets and forcing them and their borrowers to face up to their losses is winning the respect of the public.”

He said the Government’s decisions had also met with international approval and a favourable response from the financial markets.

“The ratings agency Moody’s described Nama as an ingenious mechanism with several successful historical precedents.”

He said: “The fact is that Ireland is now regarded by international investors as a country that faces up to its problems and deals with them effectively.

“And the credit for this growing confidence rests with the citizens themselves. They have demonstrated their gritty determination to get this economy back on the road to growth. They have shown the world that the enterprising spirit that brought us the boom is alive and well, and will lead us back to recovery.”

Fine Gael finance spokesman Richard Bruton said, however, that the report on Irish Nationwide “reminds us of everything that was rotten, the way institutions were run as personal fiefdoms and even still those who ran them have not in any way suffered any consequence for what has happened. And the consequences for taxpayers, for mortgage holders, for people looking for jobs are extraordinary.

“Ordinary people have been brought to their knees and they want accountability.”

People looked to the US, he said, “and they see that there are 42 bankers in jail, that the banks are already paying back some of the money extended by government. They look to Iceland and the prime minister, the minister for finance, the governor of the central bank, the head of the regulatory authority have all been found to be negligent by a justice of the supreme court.”

He added: “There, at least, they have a clear decision that there was negligence. They’ve pointed the finger and there is accountability.”