IT IS time for a “clean-out” of all senior bankers if a new regulatory regime is to work, the Dáil has been told.

Former Fine Gael leader Michael Noonan warned that to get a fresh start, “we need a clean sweep”, and there was no point in having new rules if the same people were supposed to implement them.

“There are many people still in situ who were tainted by the culture and they will revert to type within a year or two years when things settle down. The next generation of deputies in 15 or 20 years’ time will be back again” to discuss another banking crisis, he said.

He said that during the past 18 months, senior banks had lied to Government Ministers. “Bankers had lied to members of this House. Senior bankers have lied to their shareholders. Senior bankers have lied to the public. Senior bankers have lied to the regulators. Senior bankers have lied to the personnel in the Central Bank.

“And yet the people who briefed them one step down are now in charge. We cannot have a system which works effectively in accordance with a set of new regulations unless we have new people with a new culture to implement the rules.”

Mr Noonan said everyone who had served on a bank board should be gone. He said everybody who shared in “the banking culture” and who had now been promoted to senior positions “should be gone”. He said the same applied for those who served on audit committees and risk-assessment committees.

During the continuing Dáil debate on the Central Bank Reform Bill, the first of three pieces of legislation to create a new financial regulatory system, Mr Noonan said rules were ignored “by the same set of people who were reared and educated in a particular culture and still believe that bankers are autonomous and all this regulation stuff is only guff down in the Dáil”.

He referred to the 36 per cent annual growth “of the balance sheet of Anglo Irish Bank, eight years out of nine, and nobody noticed in the Central Bank, in the regulator’s office, in the Department of Finance”.

He said he was calling for a full clean sweep of everybody who was involved. “I have no particular animosity against the people who head up our banks now. But there comes a point, whether one is culpable or not culpable, if you’re there at the time and it happened on your watch, you’re responsible and you have to go. That’s the rule that applies all over Europe. That’s the rule that applies all over the United States. It doesn’t apply in Ireland.”

Think of the Dirt inquiry, he said, where banks were obliged to pay back some of the tax they previously evaded. But the people who organised it remained unscathed. “They were in their jobs, many got promoted and they worked their way up to the top of the banking system [and] the same culture continues.”