Pearse Doherty (Donegal South West, Sinn Fein) | Oireachtas source

I understand the hierarchy or waterfall system that will obtain when individuals will be bailed in, when money will have to be put up and when the relevant state or the ESM will intervene. However, my question relates to direct recapitalisation. Unless the Minister can provide some information to the contrary as a result of his discussions with his colleagues, there is no suggestion the modalities which would be applied to a retroactive recapitalisation application would be similar to those for the direct recapitalisation instrument. I refer to the waterfall model to which the Minister has referred and which will be applicable to any member state once the system comes into operation. We would have to use it as a basis for the type of retroactive recapitalisation support the State should have received in the case of AIB, for example. When the waterfall model is followed, what will remain is the quantum of money that will be on the table. There is no suggestion this will be the case because, as the Minister indicated, the board of governors will deal with the modalities when making its decision. Will that actually be the case? If it does prove to be the case, let us be honest and say the quantum of money which is likely to come back to the State from that type of procedure is quite small when compared to the actual amount spent in recapitalising the relevant institutions, particularly if we are obliged to go through the process of burning bondholders and creditors, involving the State up to a certain point and then going to the ESM.