Minister for Finance Michael Noonan discussed the changing attitude of the ECB to imposing bank losses on senior bondholders during a meeting with ECB President Mario Draghi in Frankfurt this evening.

Mr Noonan said the meeting covered all aspects of improving Irelands debt sustainability, including the issue of IBRC promissory notes.

He confirmed that the Eurogroup meeting on 9 July had discussed the issue of imposing bank losses on senor bondholders in certain circumstances.

Mr Noonan said it was part of an evolving dicussion on the issue of bank resolution legislation and the discussion on senior bondholders was "inconclusive".

He added that in any case there were now no longer enough bondholders left in the Irish banking system for a change of policy to have any direct impact.

However, he said that in the light of the decision of the last European Council, any changes to policy for one country "would be reflected in the Irish programme in some other way".

An ECB spokesman said "Mr Draghi noted that the question of burden sharing with senior bond holders is evolving at the European level, through ongoing discussions on an EU Resolution Directive.

“He expects that these developments will be reflected in the Irish adjustment programme."

The ECB said the meeting took place as part of the ongoing discussion on Ireland’s bailout programme, and follows an earlier meeting between them in January, and contacts at various Eurogroup meetings.

The bank said both men "took note of the conclusions of the Euro Summit with regard to further enhancement of the sustainability of the Irish adjustment programme."