Central bank governor to stay in post during reforms
Central Bank Governor John Hurley will remain in his job for several more months as the Government pushes through sweeping reforms of financial regulation, it emerged tonight.
Under the plan watchdog the National Consumer Agency will take over information and education duties from the Financial Regulator.
Finance Minister Brian Lenihan said the new measures would help restore confidence in the country’s beleaguered banking sector.
“The Government is taking the necessary measures to allow the domestic banking sector to service effectively the needs of the real economy and to restore the reputation of the country as a sound and secure centre of excellence in international financial services,” the minister said.
“We will ensure Ireland is regulated to the best EU and international standards.
“Our approach mirrors arrangements proposed at EU level and will ensure a cohesive approach between critical elements of effective financial regulation.”
The reforms were part of the Government’s emergency budget unveiled in April.
Mr Hurley was due to leave his post in March but has been asked to stay on to oversee the new regime.
It includes changes within the Central Bank and the Financial Regulator and the creation of a new institution, the Central Bank of Ireland Commission. The minister said the new body would oversee individual firms and ensure the stability of the country’s financial system.
He claimed the reforms would create a more efficient regulatory system.
Two new posts will be created, a Head of Financial Supervision and a Head of Central Banking, while Mr Lenihan also committed to hiring a substantial number of new staff to work in the expanded regulatory body.
Labour Finance spokesperson Joan Burton said the new regime was similar to the banking commission proposed by the party in February.
She claimed shuffling positions within the Central Bank would not be enough to restore confidence in the banking sector.
“We need an assurance from the minister that the era of light-touch regulation is over,” she said.
“It is this reckless approach, promoted by successive Fianna Fáil governments that contributed more than any other factor to the property bust and the subsequent economic crash.
“As outlined in our banking policy document in February, A Clean Break from Business as Usual, the Labour Party believes that transparency and accountability should be the cornerstone of financial regulation in Ireland.”