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Worries on finance framework ‘miss the point’

The Central Bank’s deputy governor has defended the standards of conduct set out for top financial executives in a new individual-accountability framework.

Sharon Donnery (pictured) was speaking at the annual Financial Services Ireland dinner yesterday (16 November).

A recent survey found that 57% of those working in the financial-services sector were worried about personal exposure to liability arising from the Central Bank Individual Accountability Framework Bill 2022.

‘Positive outcomes’

Donnery said that, while the regulator’s sanctioning and enforcement measures received a lot of headlines, in the end they were designed to encourage positive outcomes.

“The individual-accountability regime will give us measures so we can pursue individuals directly for their misconduct, rather than only where they have participated in a firm’s wrongdoing,” she told the event.

Donnery added that, while she had heard “a lot of consternation” about this, it missed the point about the framework.

“The IAF bill prescribes standards of conduct which I believe are reasonable – for your customers, for your investors, for the Central Bank, and for society as a whole,” she stated, citing the requirement to act honestly, fairly, and professionally, and not to mislead customers about services.

‘Effective governance’

Donnery said that the Central Bank believed that most firms and individuals were already holding themselves to such standards, and that ensuring clearer accountability was not unreasonable.

“A successful individual accountability framework should encourage more effective governance. If the framework is embedded properly, and embraced by firms, it should ideally lead to fewer issues in the sector and limit the need for action against individuals at all,” the deputy governor continued.

She added that the Central Bank would be “aiming to engage widely” on the framework, and would receive feedback as part of a consultation process.