THE GOVERNMENT WILL not oppose a Sinn Féin Private Member’s Bill which will make it a crime for bankers to provide false or misleading information to the Central Bank.
The Central Bank (Amendment) Bill makes lying to the Central Bank a criminal offence with a possible penalty of five years in jail or a fine of up to €250,000.
The Central Bank will also be empowered to take action against an individual even if the whole institution has not been found guilty of deception.
Sinn Féin’s Pearse Doherty said the recommendations were first made by then-Central Bank governor Patrick Honohan in 2015, but were not acted upon by government.
‘Lying or misleading’
Introducing the Bill last month, Doherty quoted the governor, who claimed a loophole in the Central Bank legislation effectively allowed “individuals to act without responsibility for their actions of lying or misleading”.
“The context was in a request by the Minister to the Central Bank to provide reasons as to why insurance premiums, especially car insurance, were out of control. One would have thought that this warning from the Governor would have sent the minister’s official scurrying to draft the necessary changes in the law to close the loophole but that did not happen.
“Here we are two and half years later and it did not even warrant a mention in the Government’s so-called plan to tackle white-collar crime,” Doherty told the Dáil at the time.
Under current regulations, an individual accountability within a bank is still avoidable unless the individual is proved to be participating in a breach committed by the financial institution.
“Essentially, bankers can lie through their teeth to the Central Bank time and again, provide misleading information and documents and the Central Bank can do nothing unless it first proves that the entire regulated entity, the bank itself, was involved in that breach,” said Doherty, who added that this was the very reason the Governor of the Central Bank wrote to the minister in 2015.
‘Nobody is responsible’
After listening to the many victims of the tracker mortgage scandal, Doherty said the Oireachtas Finance Committee continues to be told by every major bank “that nobody in particular was responsible for the theft of hundreds of millions of euro stolen from its customers”.
“As things stand, no bank official, CEO or board member or any insurer who spun a web of lies to the Central Bank and to thousand of customers can be held accountable for their actions, for what they did and said, for the lies they told unless it can be proven that the regulated entity was complicit. That has to change,” said Doherty.
The Sinn Féin party spokesperson said his Bill, if passed into law and used by the Central Bank, will see anybody, no matter how deeply entrenched in the establishment, face the same consequences for lying to the State’s financial regulator.
A government spokesperson confirmed that the Bill would not be opposed, adding that the Finance Minister Paschal Donohoe agrees with the “principle objective” of the Bill.
It’s understood the government already has a lot of its own work on the same issues underway, which will result in government legislation to hold bank managers accountable for their actions. The “far-reaching” legislation is expected to be “broader” than Doherty’s Bill, according to the government press secretary.
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