john hurley : the role of the central bank and the current issues being considered by the financial services regulator opening statement by mr john hurley, governor of the central bank and financial services authority of ireland, to the joint committee on finance and public service, dublin, 1 june 2004. * * * introduction thank you chairman for the opportunity to address the committee this afternoon. my colleagues and i are happy to discuss with the committee the general issues arising from the overcharging by aib of certain foreign exchange customers. i appreciate that you noted, in your invitation to us, that an examination into specific issues relating to aib bank is ongoing. other serious issues have emerged since the time of your invitation. as you know, work on all these matters is now the responsibility of the irish financial services regulatory authority rather than the bank. in my opening remarks i would like to deal with the following : • the role of the central bank in financial regulation following the restructuring that took place last year ; • the central bank ’ s role in relation to financial stability ; • the profile of the banking system in ireland ; • the former responsibilities of the central bank in relation to foreign exchange charges ; • the current issues being considered by the financial services regulator ; and • the compliance environment. role of the central bank i would like to start by briefly putting the role of the central bank in context by describing the new regulatory structures that are now in place following the establishment of the new financial services regulator and our own restructuring last year. on the first of may 2003 the central bank and financial services authority of ireland was established. this body carries out all the activities formerly carried out by the central bank of ireland as well as several additional regulatory functions, including those previously discharged by other regulatory bodies. the regulatory departments of the central bank, i. e., staff and records, were transferred to the regulatory authority. accordingly the cbfsai has two distinct component entities : 1. the central bank in addition to being the corporate entity with responsibility for central services, the central bank also has extensive other functions, including euro - area related functions. our main functions are : a ) monetary policy operations ; b ) financial stability ; c ) economic analysis ; d ) currency and payment systems ; e ) investment of foreign and domestic assets. 2. the irish financial services regulatory authority as you know, this body is responsible for the regulation of all authorised financial entities including banking, securities and insurance and for consumer protection and consumer information matters. the financial services

investigated by the financial services regulator. the financial services regulator has gone about its task in a comprehensive, detailed and pro - active manner. i have full confidence that it will reach the appropriate conclusions and take any necessary further remedial action. thank you, chairman, for permitting me to make this opening statement. my colleagues and i will be very happy to answer any questions the committee may wish to put to us.