Rethink needed on ways to tackle white-collar crime, says Elderfield
System for dealing with individual accountability not as effective as it could be, says financial regulator
Financial regulator Matthew Elderfield says the system for tackling white-collar crime is not operating very well. Photograph: Dara Mac Dónaill
Mr Elderfield, who will step down from his role later this year, told the Public Accounts Committee yesterday that one observation he would make before his departure was that the system was not as effective as it should be in dealing with individual accountability when it came to financial fraud or failure.
“White-collar crime is an area where the system is not operating very well,” he said.
He suggested that the Law Reform Commission or a retired judge should conduct a stock-take in this area to see if the authorities could tackle white-collar crime more effectively.
“The track record is weaker [in Ireland],” he said.
“We have done a good job on [dealing with institutions] but wish we had done a better job on individuals,” he said.
Mr Elderfield, making his last appearance before the PAC, told the committee members that the banks in Ireland were sufficiently capitalised at present but that new tougher rules – mainly the Basel 3 rules – would result in them requiring more capital in future.
He said that the new Basel 3 rules on tax losses would require an injection of €6 billion in new capital. When asked by Independent TD Shane Ross how this would be achieved, he said it could come from bank profit, from banks issuing new capital or, if they were not in a position to avail of the first two options, possibly from the European Stability Mechanism, if that is in operation according to plans.
Mr Elderfield was responding to a report by the Comptroller and Auditor General Séamus McCarthy which had shown weak banking supervision and regulation in the run-up to the financial crisis and which had examined weakness in the “light-touch” or “principle-led” rules that were prevalent at the time.
The regulator told the hearing that there had been much improvement in the system since then but that the Central Bank was “not there yet”.