The Central Bank could use its extensive powers to hold to account those engaged in “swindling” by the imposition of fines of up to €1 million and disqualification from working in a “controlled” area.
Tánaiste Leo Varadkar insisted that a number of other agencies including An Garda Síochána and the Director of Corporate Enforcement also have powers to take action in such cases.
He rejected claims by Sinn Féin finance spokesman Pearse Doherty that the Government had "time and again" refused to introduce legislation the Central Bank has been "begging for" for more than three years to provide for individual accountability.
Mr Doherty raised the issue of the Davy brokerage scandal and compared the treatment of those involved in the bond controversy with the treatment of people who failed to pay their TV licences and of victims of the tracker mortgage scandal.
Mr Varadkar said legislation to bring in a senior executive accountability regime was first suggested by the Central Bank in 2018 and could not have applied four years earlier, when the Davy stockbrokers bond deal controversy occurred.
Mr Doherty said that in 2014 “the Davy 16 got together and formed a consortium for the sole purpose of swindling that company’s client out of money.
“They were breaking the rules and regulations and not one of them has been held to account.”
In the same year, almost 14,000 people were prosecuted in the courts for not paying their TV licence while the year before 411 people were jailed for that offence, he said.
Scandal
“In the same period, more than 40,000 people were essentially robbed by banks as a result of the tracker mortgage scandal,” and more than 100 lost their family homes.
Mr Doherty said “promises and promises” had been made to introduce enforcement legislation but it had not materialised.
The Tánaiste said the Minister for Finance will introduce Central Bank (Amendment) Bill as soon as possible but stressed it was first mentioned in a Central Bank report three years ago and could not have applied retrospectively.
Insisting the regulator already has far reaching powers, he said: “It can take action against individuals under its administrative sanctions procedure and fitness and probity regime.
“It can conduct an enforcement investigation into an individual, resulting in sanctions, including: a fine of up to €1 million, a requirement to pay the bank’s costs for the investigation inquiry, and disqualification from working.
“The Central Bank can prohibit a person who is not fit and proper from performing any controlled function into the future.”
Central Bank director general of financial conduct Derville Rowland told the Oireachtas Finance Committee on Tuesday that the regulator did not find any suspected criminal activity when investigating Davy for market-rules breaches.
However, she said she intends “to have proactive discussion” with both the Garda and the Office of the Director of Corporate Enforcement since the Central Bank has completed its investigation into Davy, which led to a record €4.1 million fine for the brokerage.
Ms Rowland said the Davy situation remains “a live supervisory matter” but declined to comment on whether the regulator will take action against individuals, although she highlighted that the Central Bank has a “track record” of taking such action.
