Labour Calls For 'Full Implimentation' Of Bank Inquiry

The Labour Party has urged the Government to fully implement the findings of a recent report into banking practices as part of the workings of the new investigation into the banks.

Speaking today, Finance spokeswoman Joan Burton said she welcome the report from the Central Bank, Banking Supervision: Our New Approach, which was published yesterday.

The report recommended more challenging regulation and tougher enforcement practices whilst also suggesting legislation to merge the financial regulator and Central Bank into one regulating body.

"I hope that this report will represent the final death knell for the regime of ‘light touch’ regulation, which was promoted by Brian Cowen and Charlie McCreevy when they held the position of Minister for Finance and which facilitated the banking crisis that has now placed such a financial millstone around the necks of Irish taxpayers," Ms Burton said.

She added: "We are paying a huge price for what was allowed to go on, both in terms of the massive financial bail out for the banks and the social crisis of families unable to meet their commitments."

Ms Burton added that a number of financial institutions had encouraged people to take out 100% mortgages and many of these same families now find themselves in negative equity and in a growing number of cases unable to meet mortgage repayments.

The Labour spokeswoman said that Bank officials were not just approving loans, but in many cases, irresponsibly "hawking expensive financial products".

The document, published yesterday, said that “all banks can expect a more intrusive and challenging approach to banking supervision” and says that it will focus particularly on domestic institutions with a lot of influence on the overall economy.

It is not yet clear how many of the proposals will be fully implemented by the Government.

(DW/GK)