Lack of progress of criminal inquiry into banks 'galling', says McGrath

THE LACK of progress in the criminal investigation into the banks was “galling” for ordinary people, Fianna Fáil finance spokesman Michael McGrath said.

“The investigation into certain transactions at Anglo Irish Bank and other institutions have been going on for almost three years,” he added.

He said that in February 2009, the fraud squad had raided the offices of Anglo Irish Bank and, while some files were with the Director of Public Prosecutions, no prosecutions had been brought and no charges had been laid before any court regarding banking practices.

“For the sake of confidence in the democratic and political system, it is essential those matters are brought to a conclusion in the short term,” he added.

Mr McGrath said it was interesting to note the comments from outgoing DPP James Hamilton that it might be necessary to bring in specialist jurors or to provide training and expertise for lay jurors so they would have the know- how to adjudicate on some of the complex criminal cases should they come before the courts.

“I hope the Government is taking this matter seriously, because the last thing we want is for cases to come to court and for there to be no satisfactory process whereby justice can be served,” he added.

He said while reckless lending was undoubtedly a prominent part of the system for many years, others in the banking system were possibly also guilty of fraudulent and criminal activity.

Mr McGrath was speaking during the debate, on Tuesday and yesterday, on the Central Bank (Supervision and Enforcement) Bill 2011.

Introducing the Bill, Minister for Finance Michael Noonan said it brought clarity to the bank’s ability to set requirements, providing for good information flows and objective analysis to support regulatory supervision.

“Where things go off course, there is provision for prudential intervention and corrective action,” Mr Noonan added. “Where the law is broken, there are effective and dissuasive, yet proportionate, sanctions.” It was not a piece of “crisis legislation”.

“It provides a long-term regulatory framework to underpin the regulation of more than 14,000 regulated financial service providers in Ireland which will be covered by the Bill. That includes insurance companies, investment intermediaries, bureaux de change, securities and investment firms and banks.”

Mary Lou McDonald (SF) said she was concerned about the absence of any compulsion on the Central Bank to act on information provided by whistleblowers.

“I understand that it is not possible to act on every single piece of information provided, but the experience of many whistleblowers, under the previous regulatory regime, suggests that some form of obligation to act should be inserted into the Bill.”

Richard Boyd Barrett (ULA) said the Bill was a positive move, insofar as it acknowledged the need to regulate banking to a greater degree than previously.

There was an increase in penalties on financial institutions and individuals who were guilty of inappropriate or illegal malpractice or behaviour.

Anything that might encourage whistleblowing in the industry was to be welcomed.