Mr. Aidan Carrigan:

The mutualisation element was debated at some length and there are benefits and costs associated with it. A European fund is available. This means that if bank issues are to be resolved in another country covered by the European fund, the fund will have to be replenished by banks in countries that are not subject to resolution. During the financial crisis it would have been to our benefit if all of the other European countries had been paying into a fund on which we could have drawn. In the future we will have the benefit of being able to draw on a European fund in, I hope, the unlikely event that it happens again. If a large, significant, systemically important bank in Germany or France were to be subject to resolution, there would be a bigger call; however, this is probably less likely to happen. It is mainly smaller banks that have had issues resolved. If it were to happen, all banks around Europe would contribute at the same percentage and annual rate.

It would not mean a systemic shock to banks in Ireland if a large bank in Germany were to be put into resolution. It would mean Irish banks would have to make the contributions to the fund they were already making.