Press Release 21 July 09
Tá an preasráiteas seo ar fáil as gaeilge chomh maith
The Financial Regulator has adopted a more intensive and intrusive regulatory approach, increasing its on-site presence and focusing on corporate governance, risk management and business strategies. Speaking at the launch of its 
annual report for 2008, the Chairman of the Financial Regulator, Jim Farrell, said the exceptional scale and rapidity of the decline in the economic environment at home and throughout the world made the task of regulation extremely difficult and, in turn, resulted in regulators everywhere being behind the curve in taking sufficient pre-emptive action.
“Since September 2008, in response to these events we have fundamentally changed the way we regulate, to take a more intensive and hands-on approach to the institutions benefiting from the State guarantee.” said Mr Farrell. “Our supervisory staff are now located on site and attend certain credit, treasury, audit, board and other meetings to monitor and assess the strength of corporate governance and management of risk. Banks now provide more detailed information on key risks to the Financial Regulator and chief executives are expected to reform how banks are managed. Boards of financial institutions must now completely overhaul their approach and probe, question and challenge management. In particular non executive directors must play a more active role and we are monitoring the effectiveness of bank boards in this regard.”
Acting Chief Executive and Consumer Director, Mary O’Dea explained that reform of the supervisory approach is proceeding in tandem with developments at European level and has already started with the recruitment of new regulatory, banking and risk experts, the up-skilling of staff and a realignment of risk based supervision with the establishment of a new risk and enforcement division. She said that consumer protection and conduct of business will be maintained in the new unified structure, “We are working closely with the Central Bank to ensure that the transition to the new regulatory arrangements announced by Government is smooth and effective.”
She added, “It is critical that the new structure captures all the activities that pose risks for consumers of financial services. Effective prudential regulation is important for consumers in ensuring that their savings and investments are secure. Effective consumer protection also requires that consumers have legal protections, such as standards for sales practices, suitability requirements and disclosure rules that are provided through our statutory codes of conduct. This is especially important in the new environment where a necessary focus on prudential issues could have the unplanned and unwelcome side effect of reducing the focus on the other important aspects of consumer protection.
The Annual Report of the Financial Regulator also includes an analysis on the crisis and supervisory approach. While dealing with the impact of the crisis was the top priority throughout 2008, the Financial Regulator undertook a number of other initiatives and activities for the 14,897 firms it regulates including:
- 722 inspections and review meetings completed
- 9 administrative sanction settlements
- 36,000 financial returns analysed;
- 1,600 prospectuses approved;
- Significant preparatory work for a new EU wide regulatory regime for insurance companies;
- A new regulatory regime established for retail credit and home reversion firms;
- Consumer protection code for clients of moneylenders established and;
- A voluntary consumer protection code for credit union members developed.
A full list of the key actions taken in 2008 is available in the Annual Report.
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