Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I would like to welcome Mr. Carrigan and his colleagues from the Department of Finance and the Central Bank. I welcome the fact that a common bank resolution regime will eventually be in place throughout Europe. It is long overdue. It is a great pity one was not put in place a number of years ago, which could potentially have been to our benefit in Ireland.

I will continue in the same vein as the Chairman's questioning. I fully understand Mr. Dempsey's statement that the resolution tools are a last resort. One would hope they will never have to be applied, but experience tells us otherwise. We certainly need to be prepared for that.

Can Mr. Dempsey elaborate further on how the bail-in tools work? He said that shareholders get hit first, and that is what happened in Ireland. About €60 billion of equity was lost in shareholder values. Subordinated creditors would be next in line, which also happened here. He also said that only after these had been exhausted could senior creditors be written down. The remaining senior creditors are the senior bondholders and depositors, presumably those with more than the €100,000 covered under the deposit guarantee scheme. How would the distribution of losses work when we get to that point? If senior bondholders and depositors are left, how do the losses get divided up at that point under these tools?