Ombudsman for financial bodies to be established

An ombudsman to deal with consumer complaints about banks and other financial institutions will be established under new legislation introduced in the Dáil by the Minister for Finance.

Mr McCreevy said the Bill would complete the "new architecture" of regulation, started with the creation of the financial services regulator.

The Bill also creates new auditing and reporting obligations for financial institutions and gives the authority power to impose penalties on financial institutions.

However, Fine Gael called for "confirmation-type" hearings for appointees to these panels. The party's finance spokesman, Mr Richard Bruton, said the Minister had repeatedly dismissed such hearings because "worthy people would not come forward", but he said that "very worthy people come forward, are proud to have positions on State boards and are happy to be accountable to the Oireachtas".

Mr McCreevy said he would appoint the panels only after consultation with the Minister for Enterprise, Trade and Employment and the Taoiseach.

The Minister said the Bill would establish the "essential building blocks of a modern, consumer-focused regulatory system for the financial services sector in Ireland", and with its introduction "we will also have contributed significantly to the objective of maintaining Ireland's reputation as a business-friendly, but well regulated domicile for international financial services activity".

Labour's spokeswoman, Ms Joan Burton, said that "we have yet to see the day when the International Financial Services Regulatory Authority will bite". She said judgment would be deferred "until we see a conflict involving financial institutions or service providers".

Mr Paudge Connolly (Ind, Cavan-Monaghan) said the Bill represented a charter for the protection of consumers against malpractice by unscrupulous institutions.

He said that banks such as ACC, now owned by Babobank, were taking their customers for granted.

The Bill now goes to the committee stage for a debate on amendments.