Warning: ‘a future comparable shock could arise from a non-banking sector’

The famous phrase about generals making preparations for fighting the previous war comes to mind when you survey the weighty tome published on Tuesday by the Law Reform Commission – though not in a bad way.

Undoubtedly the impetus for the report comes in large part from the crisis that hit the economy, and society generally, as a result of the atrocious running of the Irish banking system during the noughties boom.

But the 800-page Regulatory Powers and Corporate Offences report is in no way restricted to the financial sector and chimes with the cheerful observation made by the former governor of the Central Bank, Patrick Honohan: "There will be another crisis, that's for sure, and it may not be in banking."

The commission says it benefitted in its deliberations from discussions with eight financial and economic regulators, and that its suggestions may also be relevant to other sectors of the economy.

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It may be difficult to predict exactly how a future financial or economic crisis might arise, the report observes, and given the more robust, risk-based regime in place since 2010 for financial services as a result of the banking crash, “a future comparable shock could arise from a non-banking sector”.

While there is no doubting the importance of trying to regulate the beast that is banking, “recent history illustrates that other major entities, whether national or international, pose potentially serious economic risks”.

In this regard the report cites emissions from motor vehicles, the poor regulation of health products such as blood products and breast implants, the dangers inherent in poor regulation of personal data, and the need to ensure the effective regulation of the telecoms system, on which virtually the entire economy is dependent.

The commission suggests a basic toolkit for regulators in an attempt to stave off disaster. The regulators the commission engaged with were the Central Bank, the Broadcasting Authority, the commissions for aviation regulation, communications regulation, the regulation of utilities, for competition and consumer protection, the Health Products Regulatory Authority, and the Office of the Director of Corporate Enforcement.