The Central Bank has pressed for laws to make "egregious recklessness" by the heads of banks and insurers and other financial firms a criminal offence in the event of a company's failure.
The proposal was submitted in September – and published on Tuesday – in response to a Law Reform Commission paper in 2016 on regulatory enforcement and corporate offences. It also goes beyond measures contained in a Government package of planned corporate law reforms, unveiled in November, to effectively combat white-collar crime.
"Regulators require a coherent, robust and well-drafted legislative framework that allows for adaptive responses to suspected breaches of regulatory requirements," said Derville Rowland, director general for financial conduct at the Central Bank.
“A well-stocked enforcement toolbox is vital to ensuring the Central Bank can safeguard and protect consumers and we are committed to continually reviewing our powers and requesting amendments where we see them as enhancing the framework.”
Then Central Bank governor Patrick Honohan said almost two years ago that banking reform laws enacted in the UK in 2013 tackling flagrant recklessness in risk-taking by those who were in charge of failed financial firms "could be usefully mirrored in Ireland".
The Central Bank submission to the Law Reform Commission seeks to further strengthen the accountability of senior staff of financial companies, requiring them to file a statement of responsibilities that clearly states matters for which they are accountable.
“These requirements would assist in assigning responsibility to individuals in a regulatory context and decrease the ability of individuals to claim that the culpability for wrongdoing lay outside their sphere of responsibility,” according to the regulator.
Standards
Irish central banking laws from 2010 limits to six months the period under which a person can be suspended while falling under regulatory investigation. The Central Bank is looking for this to be extended.
The Central Bank has also called for certain “core common standards”, such as the requirement on firms and individuals to behave with honesty and integrity and possess competence and capability, to be “embedded” within a legislative framework.
The Government initiative to tackle white-collar crime, unveiled in November, includes new offences relating to bribery and a stronger Office of the Director of Corporate Enforcement. The collapse last year of a trial of former Anglo Irish Bank chairman Seán FitzPatrick prompted criticism from Government Ministers after the presiding judge found that the ODCE's investigation into the matter fell short of the impartial, unbiased investigation that an accused person is entitled to.
