The Minister for Finance says a new bill will give more powers to the Central Bank to determine what are the levels of behaviour and code of conduct that needs to be met, for certain key roles in banks.

Paschal Donohoe said that if that code of conduct is breached, the Central Bank will have additional powers to make fines and impose sanctions on an individual level.

The Minister pointed out that there is €97 billion in deposits in banks, adding that "we need good people running the banks which are well regulated".

Mr Donohoe said that Irish banks have made a huge amount of progress but there is still "a journey in our banks that still needs to be completed".

The Cabinet yesterday agreed to proceed with drafting a Central Bank (amendment) Bill to enact a series of recommendations made by the Central Bank to the Government.

Those recommendations in turn flow from a study of the culture of the banking and financial services sector, commissioned by the Minster for Finance in the wake of the Tracker Mortgage scandal.

Under existing legislation individuals cannot be held responsible, nor have sanctions applied to them by the Central Bank in the course of its regulator activity.

The new legislation will introduce a Senior Executive Accountability Regime, which places obligations on both firms and senior individuals within them to set out clearly where responsibility for decision-making lies.

It will then introduce statutory standards of conduct for individual executives and firms, making it easier for the Central Bank to hold them to account.

Envisaged sanctions include fines and being banned from being a bank executive.