Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

They will. The legal link and the pari passu link between senior bondholders and depositors has been broken and all deposits will move to a lower level in the hierarchy of bail-in assets, as we discussed previously, but within that hierarchy the position has been nuanced and refined more and a differentiation has been made between natural persons with big deposits, over €100,000, and SMEs as against corporations. We can get the paper that has been requested.

In regard to the figures of 8%, 5% and so on, if a bank is bust and needs a rescue and cannot manage without help, there is a resolution authority which organises the bail-in. If the level of impairment is 8% of its balance sheet, all of the rescue will be by bail-in. If the level of impairment exceeds 8% of its balance sheet, it will move to the next phase, the next 5% of its balance sheet; an amount equivalent to the next 5% of its balance sheet can be accessed elsewhere - a resolution fund the sovereign might have or the ESM. In a very bad situation such as in the case of AIB, where the level of impairment exceeds 8%, plus 10%, andthere is still a level of impairment beyond 13% of its balance sheet, it again goes back to a bail-in and the resolution authority might return to the senior bondholders for an additional haircut or the ESM could be directly accessed at that point. In the first phase, in the case of the figure of 5%, there would be indirect involvement by the ESM because the sovereign would have to apply. However, for the tranche beyond the figure of 13%, if such a case arises in extremis, the application could be made by the institution directly to the ESM if it required recapitalisation. That is the general position. I am explaining it very simply, but we will get a paper for the Deputy which is not quite as simple but not as complex as a technical paper.