Dáil Éireann Debate, Thursday - 16 May 2013
106. Deputy Andrew Doyle asked the Minister for Finance the discussions he had with his counterparts at the 14 May ECOFIN meeting in Brussels regarding the bail-in tool; and if he will make a statement on the matter. [23545/13]
View answerAt the ECOFIN meeting on 14th May Finance Ministers discussed a range of items including the proposal for a bank recovery and resolution directive ("BRRD"). The BRRD proposal aims to introduce an effective recovery and resolution framework for credit institutions and investment firms at national level to ensure minimum harmonisation at EU level. The proposal provides for three stages of crisis prevention and management - a preventative stage, an early intervention stage, and a resolution stage. Part of the resolution stage seeks inter alia to establish a hierarchy of bail-inable claims that would apply in a resolution context. The discussion on 14th May focused on the design of the bail-in tool which would enable resolution authorities to write down or convert into equity the claims of shareholders and creditors of institutions that are failing or likely to fail. Recent developments have highlighted the political importance of finding a common understanding on the scope and functioning of this tool and, in particular how uninsured deposits over €100,000 should be dealt with in bail-in.
I am glad to report that the discussion provided the Presidency with sufficient clarity on the position of Member States to enable us to press ahead with our efforts to achieve agreement on this file. In particular I noted convergence on a number of points:
- agreement among Member States that deposits under €100,000 must be fully guaranteed;
- considerable support for depositor preference for uninsured deposits i.e. they would be the last category to be bailed-in;
- general agreement on a broad scope for bail-in, with a limited list of defined exclusions;
- general agreement that the level of loss absorbing capacity of an institution must be set at a level to match the scope of exclusions.
The objective of the Irish Presidency in placing this item on the May ECOFIN agenda was to try to achieve a sensible compromise on this key issue which would help to unlock discussion on other areas of the BRRD notably the financing element. I am proposing to bring the BRRD dossier back to the ECOFIN on 21st June with a view to reaching a Council agreement.
However the Deputy will appreciate that much depends on the willingness of all Member States to compromise on what are complex and difficult issues. For the Irish Presidency's part we will continue to afford top priority to the legislative files relating to Banking Union, including the BRRD, in line with the conclusions of the European Council which set out a time frame and series of steps for achieving this.
