The Director General of Financial Conduct at the Central Bank has said the overwhelming majority of firms and employees within the financial sector who already approach their roles responsibly will have nothing to fear from a new individual accountability regime.
Derville Rowland said when implemented the initial focus of the new framework will be on embedding it into the Central Bank's processes and ensuring firms do the same thing.
But she warned the regulator would not hesitate to take enforcement actions where warranted.
She added though that if firms do the work to embed the framework properly, there should be fewer serious issues in the sector, meaning fewer enforcement actions.
Ms Rowland was speaking at the Corporate Crime and Regulation Conference, organised by A&L Goodbody solicitors.
She was addressing the planned introduction of the new Central Bank (Individual Accountability Framework) Bill 2021, published by the Minister for Finance in July.
It contains a new Senior Executive Accountability Regime, requiring firms to set out clearly where responsibility and decision-making lie, as well as enforceable conduct standards setting out the behaviour expected of firms and their staff.
The bill also proposes the enhancement of the Central Bank’s existing Fitness and Probity Regime, placing a greater onus on firms to proactively certify that their staff are fit and proper, and a strengthened Administrative Sanctions Procedure to enable individuals can be pursued for their misconduct.
Ms Rowland said the new regime is ultimately about incentivising positive behaviours and promoting improved governance and culture within firms while also strengthening the Central Bank’s enforcement toolkit.
The framework would be about encouraging the good, not just focusing solely on stopping the bad, she claimed.
She said in designing the new rules, the Central Bank had been careful to make sure it wouldn’t undermine collective decision-making, by being very clear about the role and responsibilities of individuals, including their role in collective decisions.
It is hoped that the bill will be enacted in the first half of next year.
Outlining the Central Bank's actions to date in the enforcement sphere, Ms Rowland said it has concluded 144 actions, imposing fines amounting to over €166.5 million.
She said it had also disqualified 26 individuals from senior roles in firms.