Dáil Éireann Debate, Thursday - 27 May 2021
134. Deputy Michael Fitzmaurice asked the Minister for Finance the way in which the national resolution fund will be financed in accordance with EU Regulation 713/2020; and if he will make a statement on the matter. [28923/21]
View answerI assume the Deputy is referring to Statutory Instrument 713/2020: "European Union (Bank Recovery and Resolution) (Amendment) Regulations 2020" which amends SI 289/2015: "European Union (Bank Recovery and Resolution) Regulations 2015".
The Bank and Investment Fund Resolution Fund (BIFR) was set up under the 2015 Regulations and is administered by the Central Bank of Ireland.
There were no amendments to the financing arrangements for the BIFR contained within SI 713/2020, accordingly, there is no change to the manner in which the BIFR is financed.
The BIFR was established in November 2015 in accordance with Regulation 163 of the 2015 Regulations. In resolution actions the BIFR may, subject to conditionality, be used to:
- Guarantee the assets or the liabilities of an institution under resolution
- Make loans to or to purchase assets of an institution under resolution
- Make contributions to a bridge institution and an asset management vehicle
- Make a contribution to an institution under resolution in lieu of the write-down or conversion of liabilities of certain creditors under specific conditions
- Pay compensation to shareholders or creditors who incurred greater losses in resolution than under normal insolvency proceedings.
The financing sources for the BIFR are established under Regulations 166-168 of the 2015 Regulations. Credit Institutions, Irish-authorised branches of credit institutions authorised in a non-European Economic Area territory and investment firms which are in the scope of the BRRD must contribute to the BIFR.
Credit institutions and investment firms which are covered by the European Single Resolution Mechanism do not contribute to the BIFR, and instead contribute to the European Single Resolution Fund.
