The Cabinet will today be presented with proposals from the Tanaiste, Ms Harney, and the Minister for Finance, Mr McCreevy, that the new "superregulator" for the financial services industry be modelled closely on the Financial Services Authority in the UK.
As the Cabinet meets to discuss the proposals for the creation of the new regulator, the Dail Committee of Public Accounts will meet in private session to consider how its investigation into the AIB/ DIRT affair can be progressed.
The chairman of the committee, Mr Jim Mitchell TD, spent most of yesterday consulting with legal advisers and the Comptroller and Auditor-General, Mr John Purcell. It is believed Mr Mitchell will present the committee with two main options.
One is that additional powers should be sought for the C&AG to allow him investigate AIB's role in the affair directly. Currently, the C&AG's remit extends only to public service organisations and the civil service. The other option is that the committee should seek additional powers from the Dail, particularly to compel witnesses to attend and documents to be supplied. Mr Mitchell said the committee could also opt for a combination of both.
When the committee meets in open session tomorrow, the chairman of the Revenue Commissioners, Mr Dermot Quigley, will resume his testimony.
It is understood, however, that two key figures in the affair, AIB's former head of taxation, Mr Jimmy O'Mahony, and its former group internal auditor, Mr Anthony Spollen, are unlikely to appear before the committee until next week at the earliest.
Mr O'Mahony has, it is believed, indicated his willingness to attend, although Mr Spollen is understood to have sought some clarification from the committee before agreeing to appear.
The proposals the Tanaiste and the Minister for Finance will put before the Cabinet will include the transfer of the financial regulatory functions of the Central Bank, the Department of Enterprise and Employment, the Director of Consumer Affairs, the Registrar of Friendly Societies and trade organisations such as the Irish Brokers' Association to the new regulatory authority.
A broad plan on the structure of the new regulator has been drawn up by officials of the Departments of Finance and Enterprise and Employment. Assuming the Cabinet gives the go-ahead, a working group made up of representatives of the Central Bank, banks, building societies, the investment industry, stockbrokers and consumer groups, will be appointed.
Detailed legislation will then be drawn up with the aim of having the new regulatory authority in operation by the end of next year.
In Britain, the Financial Services Authority - set up last year - has wide-ranging powers to regulate the industry and can levy fines and suspend companies from operating in the most extreme cases.
But the trade union representing professional and administrative staff at the Central Bank has come out strongly against transferring the bank's regulatory powers to a financial services authority, and has instead suggested that a subsidiary of the bank, with representation of consumer interests, be established to carry out the regulatory functions.
The MSF deputy national secretary, Mr Gerry Shanahan, said the Central Bank is already "an effective and independent financial regulator".