It has certainly been a busy year for the Enforcement Directorate of the Central Bank of Ireland ("CBI"). A new regime of tougher regulation was signalled by the CBI's Director of Enforcement, Peter Oakes, in his introduction to the CBI's Enforcement Strategy 2011-2012 guide in December 2010, which contained one particular sentence indicating a major shift in the approach adopted by the CBI: "Once we commence an enforcement case, you can assume that a proportionate and robust sanction is likely to follow under our administrative sanction powers." The CBI's Deputy Governor with responsibility for Financial Regulation, Matthew Elderfield, also made his intentions clear, promising to develop a "framework of assertive risk-based supervision underpinned by a credible threat of enforcement action", a position which has been reiterated in Consultation Paper 57, published on 25 November 2011, on forthcoming new guidelines on CBI inquiries.
This "credible threat of enforcement action" has been borne out by action, particularly since the start of 2011, which has seen a steady stream of new administrative sanction actions being pursued by the CBI against regulated entities. While exact figures showing the number of new actions commenced are not publically available, 2011 has seen a very even spread of settlement agreements between regulated entities and the CBI arising from such actions. If the trend to the end of October 2011 is maintained in the final two months of the year, the level of fines imposed in 2011 is likely to exceed those imposed in 2010.
Moreover, we are seeing the CBI entering into settlement agreements with a wider range of regulated firms than before and imposed larger fines than in previous years. An example of this was the CBI's widely reported settlement with the IFSC-based Scotiabank in June 2011, where a fine of €600,000 was imposed. Reported fines imposed as part of settlements so far this year have ranged from €10,000 up to €750,000.
Will the new regime of enforcement continue into 2012? It would appear so, meaning plenty of work for the Enforcement Directorate's newly recruited accountants, lawyers, regulatory and investigative experts. As Peter Oakes projected, total staff of the Directorate will reach 75 by the end of 2011. The big question for 2012 will be the impact of this robust approach on regulated firms next year, when coupled with the increased powers promised to the Enforcement Directorate in the Central Bank (Supervision and Enforcement) Bill 2011 once that legislation is enacted and eventually brought into force.
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