EU holding talks on a mechanism to wind down failing banks

Saturday 22 June 2013 08.26
This is Michael Noonan's final time chairing a meeting of EU finance ministers
This is Michael Noonan's final time chairing a meeting of EU finance ministers

Minister for Finance Michael Noonan is chairing a meeting of EU finance ministers in Luxembourg seeking agreement over a mechanism to wind-down failing banks.

Speaking on RTÉ's Morning Ireland, Mr Noonan said that he expected the discussions, involving all 27 member states, to be wide-ranging.

Ministers have agreed that the bailout fund, the European Stability Mechanism, can consider a retroactive application for assistance.

The deal opens the door to the ESM potentially taking a shareholding in Ireland's pillar banks, such as AIB and Bank of Ireland.

This is Mr Noonan's final time chairing a meeting of EU finance ministers, as Ireland's Presidency of the European Council comes to an end on 30 June.

A core aim of that Irish six-month term has been to secure a deal on what is called banking resolution, a Europe-wide mechanism to wind down failing banks.

The discussions are expected to be both long and difficult.

There continues to be disagreement over which creditors should be bailed-in in the event of a wind down and in what order.

Mr Noonan struck a cautious note about the possibility of the ESM taking a stake in Irish pillar banks.

He said a long process of negotiation lies ahead, but added that Ireland had kept its case for a retrospective deal on banking debt "going forward pretty strongly".

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