A revolution is needed to reform how Government performs the task of regulation according to the Attorney General, Mr Michael McDowell. All regulators whether in financial services, telecommunications, power generation, air transport or gas supply should be made fully accountable to the Oireachtas and ultimately to the people, he has said.
"The era of non-responsible executive power is over," he told the Irish Association of Corporate Treasurers yesterday. He criticised the past failures of the executive arm of Government to become involved in regulation. He said Governments liked it that way because it prevented senators or deputies questioning decisions.
"It would be naive to think we can create agencies which can establish policy, enforce policy goals, penalise regulatory entities, and shape our economic future, without a corresponding degree of accountability to the elected representatives," said Mr McDowell.
He saw little evidence of the sort of "joined-up thinking" in this State which was happening in other EU states such as the United Kingdom. A new form of political thinking needed to emerge in the early years of the next century, he said.
"In the context of the forthcoming National Development Plan and in the context of our growing financial services sector, old habits of administration, enforcement and planning must be put aside," said Mr McDowell.
Questioned on the position of the telecommunications regulator, Mr McDowell said he had a considerable degree of sympathy for a single regulator who was working without the apparatus of a Government department. He said the position of a single regulator must be a lonely position to be in.
On the issue of a proposed single regulatory authority for financial services, Mr McDowell said the implementation advisory group which he chaired favoured a radical departure from the conventional licensing system. Under the proposals, he said, non-court tribunals could hear, determine and propose penalties for those who breached regulations. The make-up of the tribunal would be of practised people, but independent of the sector they were regulating.
The tribunal would sit in cam- era, free from public scrutiny, to avoid destroying the reputation of a financial institution if it had not breached the law.
He proposed that the findings of these tribunals would then be published at the end of the year to ensure the public was the final "watchdog".
Asked if internal auditors would be answerable to their employers under a new regulator, Mr McDowell said: "I think the day has come when you can say that large institutions cannot be relied upon to look after themselves."
He said that while the Revenue Commissioners would still be the principal enforcer of the tax regime, the days when "Dame Street" was not concerned with tax were now over.
However, Mr McDowell warned that Ireland was not free to create harsh regulatory requirements on a mobile financial services industry. He said there must be a balance struck between creative freedom for enterprise, on the one hand, and fair and just regulation on the other.
"Between the two extremes of heavy-handed regulation and light-fingered non-enforcement, a balance must be struck which respects the dynamic forces of an enterprising market society."
