An independent financial services authority should be established to supervise all financial institutions as current regulations and legislation are inadequate, an Oireachtas joint committee report has said.

The interim report on the supervision and regulation of financial institutions from the Oireachtas Joint Committee on Finance and the Public Service says there seems to be no body or agency to ensure banks and other financial institutions are properly supervised.

The report is based on hearings which took place after the revelations that National Irish Bank had improperly taken money from certain customers' accounts.

The chairman of the Revenue Commissioners, Mr Cathal Mac Domhnaill, the governor of the Central Bank, Mr Maurice O'Connell, the Secretary-General of the Department of Finance, Mr Patrick Mullarkey and the Director of Consumer Affairs, Mr William Fagan, were among those who appeared before the committee.

The report says the Department of Finance, the Central Bank, the Office of the Director of Consumer Affairs, the Revenue Commissioners and the Irish Bankers' Federation either do not have enough powers or are structured in a way which prevents them from stopping malpractice in financial institutions.

The committee says the financial services authority should have the power to recommend the revoking of licences and the dismissal of individual managers "in cases where prima-facie evidence of malpractice is found".

The committee's chairman, Mr Michael Ahern, said, while the Moriarty Tribunal was currently dealing with many of these issues, "in the meantime it is important that measures are immediately put in place".

Further amendments and additions are expected at the next meeting of the committee on July 14th; after that a final report will be laid before the Dail and presented for consideration to the Minister for Finance, Mr McCreevy.

The report says the Department of Finance "sees its role as general rather than specific so far as banks are concerned". The Central Bank, it says, has been "largely unable to prevent the type of malpractices under current investigation, despite having access to audited reports of banking institutions". This is because it sees its role "in an overall macro sense - concerned about overall financial stability in Ireland rather than consumer protection".

The role of the Office of the Director of Consumer Affairs in consumer protection is undermined by inadequate staffing and "the fact that its present role is limited to bank charges and not practices", says the report.

It states that the Revenue Commissioners have wide-ranging powers, but are not "entitled in law to obtain all relevant information about individuals and organisations, which would enable its officers to make a comprehensive assessment of tax liabilities".

It says it would be "virtually impossible" for the Irish Bankers' Federation (IBF), because it consists solely of bank members, to have a role in the pursuit of malpractice among its members. It adds that the question of compulsory reporting by the IBF "may need to be addressed".

Another recommendation in the report is that legislation should be introduced to require "more transparency in financial institutions and the prohibition of numbered or false accounts".