Michael Healy-Rae
Ceist:87. Deputy Michael Healy-Rae asked the Minister for Finance the position regarding a plan (details supplied) for the bank sector; and if he will make a statement on the matter. [17756/13]
Amharc ar fhreagraWednesday, 17 April 2013
Ceisteanna (87, 90)
Brendan Griffin
Ceist:90. Deputy Brendan Griffin asked the Minister for Finance his views on a matter regarding retrospective reimbursement of banking debts (details supplied) [17819/13]
Amharc ar fhreagraFreagraí scríofa
I propose to take Questions Nos. 87 and 90 together.
Support for the establishment of a European Banking Union was given at the highest political level at a Summit of Heads of State & Government of the Euro Area in June of last year. In September the European Commission presented legislative proposals for a single supervisory mechanism (SSM) conferring powers on the ECB for the supervision of all banks in the euro area, with a mechanism for non-euro countries to join on a voluntary basis. The SSM is a key element of the Banking Union along with a common resolution framework and national deposit guarantee schemes. The Member States have reaffirmed their commitment to the urgent completion of all elements of Banking Union as set out by the European Council.
The Banking Union package is a priority of the Irish Presidency of the EU Council. An important step to a European Banking Union to break the link between sovereigns and banks was agreed by Ecofin Ministers in Dublin last week when they reached agreement on the creation of the Single Supervisory Mechanism. This is a major step towards ensuring financial stability, and thus facilitating growth. Earlier in 2013 the Irish Presidency concluded negotiations with the European Parliament to finalise the Capital Requirements Directive IV which is another essential element of the Banking Union programme. Another important element of the Banking Union package is the development of an operational framework for the direct recapitalisation of banks by the ESM which should include the definition of legacy assets. A Task Force of Member States has been meeting regularly since October 2012 and it expected that the ESM instrument guidelines will be finalised by end June.
The Commission’s proposal for a common resolution framework mentioned above includes provision for resolution funds to be used for supporting orderly resolution of banks in distress. It proposes that national resolution funds would interact, notably to provide funding for resolving cross-border banks. The proposal also suggests giving national resolution funds a right to borrow from their counterparts in other Member States in the event that there are insufficient funds in their own resolution fund. This right to borrow would be complemented with an obligation to lend to other funds within the Union. Safeguards would be in place to ensure that no national fund would be obliged to lend in circumstances where it wold not have sufficient funds to finance a resolution in its own territory in the foreseeable future or where the loan required would exceed more than half of the available funds in the lending Member States resolution fund. The Commission’s proposal is currently being examined intensively at Council under the Irish Presidency.
In the domestic area the Programme for Government included commitments to introduce a comprehensive special resolution regime for banks and a bank levy. The Government has fulfilled these commitments through the Central Bank and Credit Institutions (Resolution) Act and the Resolution Fund established under it. The Resolution Fund provides a source of funding for the resolution of financial instability in, or an imminent serious threat to the financial stability of, an authorised credit institution. The levy contributions by credit institutions under Regulations made under the Act feed into the Resolution Fund. The Resolution Fund will primarily be made up of contributions from credit institutions. The overall objective is to minimise taxpayers’ exposure to future financial sector difficulties.