* Says code will bring new blood into board rooms
* Code more demanding than in other countries
* Separation of role of chief executive and chairman
* Looking at similar codes for funds industry
(Adds further comments from Elderfield)
By Lorraine Turner
DUBLIN, Nov 8 (Reuters) - Ireland unveiled a new corporate governance code for banks and insurers on Monday to bring 'fresh blood' into boardrooms and prevent a repeat of the excessive risk-taking that precipitated the country's financial crisis.
A property market crash exposed years of reckless bank lending in Ireland, forcing the government to take over large parts of the industry and prompting concerns the country is at risk from a Greek-style meltdown.
Governance scandals at Dublin-based banks left the country with a reputation as the "Wild West" of Europe, hitting its status as a centre for international finance.
"It's time to bring fresh blood into the board room, which brings more challenge, asks more awkward questions and devotes more time to assessing risk," Matthew Elderfield, the country's financial regulator, said in a speech showcasing the new code.
"These requirements are more demanding than those in place in other jurisdictions as we have decided that in the area of corporate governance we do not want to simply match best practice internationally but wish to set a higher standard."
The statutory code lays out minimum standards for all banks and insurers operating in Ireland and additional rules for so-called "major institutions", which would include any lender with a significant retail presence such as Bank of Ireland, AIB and Irish Life & Permanent.
Elderfield said some large banks and insurers from overseas with subsidiaries based in the Irish Financial Services Centre (IFSC), Ireland's venue for international finance, could also be designated as major institutions.
"We believe it is important that IFSC firms too have high standards of corporate governance -- both IFSC banks and insurance companies have had their problems in the not too distant past."
In a scandal that angered Berlin, the IFSC-based Depfa bank, a subsidiary of Hypo Real Estate, ran into trouble in 2008, prompting a bailout by the German government.
Some concessions, however, were made to IFSC firms, Elderfield said during a Q&A session.
"We were persuaded, to say that the requirement that the chairman should be an independent non-exec director was perhaps going too far, so we've made some adjustments there," he said.
"The basic message is that IFSC and Ireland's reputation will be improved by strong financial regulation including corporate governance," he added.
PRIVATE EMPIRES
Under the code, which comes into effect from Jan. 1 2011, the boards of major institutions must have a minimum of seven directors and a minimum of five in all others.
The role of chairman and chief executive must be separate and there are limits on the number of directorships while a CEO, director or senior manager can not become a chairman of the same group for at least five years.
The issue of management has come under the spotlight after top executives built private property empires during the "Celtic Tiger" economy using large loans from their own institutions.
Sean FitzPatrick, the former chairman of Anglo Irish Bank, helped trigger that lender's nationalisation last year when it was revealed he had kept shareholders in the dark about 80 million euros in loans he received from the bank.
FitzPatrick was CEO of Anglo Irish before becoming chairman.
BOARD FAILURES
Elderfield said the new code had been triggered by a failure in corporate governance, particularly on a non-executive level, which resulted in boards failing to curtail excessive risk taking or control senior management.
Ireland's banks have already shaken up their top brass in the wake of the financial crisis with Colm Doherty, the managing director of Allied Irish Banks, the latest to leave last month.
Institutions which need more time to implement the changes will be given until Jun. 30 2011 and where changes to the board are necessary, companies will be allowed until Dec. 31 2011.
The regulator is also planning to introduce similar codes for other sectors of the financial services industry, including investment firms and the funds industry. (Editing by Carmel Crimmins and Jane Merriman)