Pre-Legislative Scrutiny of General Scheme of Central Bank (Individual Accountability Framework) Bill 2021

Joint Committee on Finance, Public Expenditure and Reform and Taoiseach Report on Pre-Legislative Scrutiny of the General Scheme of the Central Bank (Individual Accountability Framework) Bill 2021 - 33/F/7 April 2022

There are four (4) recommendations arising out of the Joint Committee on Finance, Public Expenditure and Reform and Taoiseach Report on Pre-Legislative Scrutiny of the General Scheme of the Central Bank (Individual Accountability Framework) Bill 2021 (33/F/7 April 2022).

The four (4) recommendations are:

• ​Recommendation 1

The Committee recommends that the Central Bank report on the possible inclusion in the SEAR of the entities currently proposed to be excluded (credit unions, reinsurance/captive reinsurance undertakings and Insurance Special Purpose Vehicles) within one year of commencement of the Act.
​

• Recommendation 2

The Committee recommends that the Department should clarify if certain payment gateways are to be excluded from the SEAR.

• Recommendation 3

The Committee recommends that, upon conclusion of the extensive consultation exercise with the financial services sector proposed, the Central Bank reports back to the Committee with any revisions or changes to the scheme based on the consultation. 

• Recommendation 4

The Committee recommends that the Department clarify the intended meaning of ‘third country branches’ of the RFSPs included in the SEAR.

The General Scheme contains 41 heads in six parts as follows:

​Cathaoirleach's forward from the Joint Committee on Finance, Public Expenditure and Reform and Taoiseach

​The General Scheme of the Central Bank (Individual Accountability Framework) Bill 2021 proposes to address matters related to individual accountability on the part of senior executives in the financial sector through a Senior Executive Accountability Regime (SEAR), the introduction of new conduct standards for businesses and individuals, an enhanced fitness and probity regime, and a breaking of the “participation link” between the firm and the individual. The proposed scheme will convey further powers on the Central Bank to intervene on these matters and have a meaningful impact on holding individuals accountable for wrongdoing.

Senior executive accountability and reform is of great importance and interest to the Joint Committee, and Members will continue to monitor and engage with the Central Bank and Department of Finance as they implement the regime and ancillary proposals. The submissions received from both the Banking Payments Federation of (BPFI) and the Irish Banking Culture Board (IBCB) highlighted to the Committee the importance of the implementation of a SEAR process that was both flexible in its implementation, but also strict in its approach in order to be effective.

In the course of the meetings held, it was established that the Committee would like some clarity regarding the scope of the entities encapsulated by the framework and the possibility that this may be widened. In addition, the Committee fully endorses the request in both submissions received as part of the scrutiny process that the consultation process should be essential in actioning the proposed measures. To this end, the Committee strongly recommends that the Central Bank reports to the Committee within one year of the commencement of the legislation on both the scope and effects of the consultation process.
I wish to thank the BPFI and IBCB for providing submissions and the representatives from the Central Bank of Ireland for attending meetings of the Joint Committee as part of the analysis of the general scheme. The Joint Committee also thanks the Secretariat for its work on this report and the Department officials who assisted the Committee with its consideration of the general scheme. The Joint Committee is supportive of the general scheme and looks forward to further engaging with the Minister as the legislation progresses through the Houses of the Oireachtas.

Report available HERE