Mr. Cathal Sheridan:

I will go through the bank recovery and resolution process. The fundamental underpinning of the process is to ensure the taxpayer is protected. I will explain how the system will operate. The additional tier 1 and tier 2 share capital instruments will be bailed in first. If that is insufficient, we will move down the waterfall using the bail-in tool within the bank recovery and resolution directive. Eligible liabilities of capital instruments that do not come within the first layer - senior debt and that type of liability - will absorb the losses. Obviously, the covered deposits are protected. The deposit guarantee scheme could make a contribution on their behalf if there were remaining losses to be absorbed. If there are further losses to be covered, we will reach the resolution fund stage. The banks are contributing to a resolution fund on an ongoing basis. From 2016, we will move into the single resolution mechanism, to which all member states will be contributing. Obviously, in the early years the prospect of there being insufficient money in the fund, if there is a big call on it, will be a big issue. A bridge financing process is being developed to try to ensure money is available for the fund. There will be a gradual mutualisation of the single resolution fund over the first eight years. The first port of call of a member state will be its own national compartment. As the years go by, there will be contributions from other national compartments. At the end of the eight years, there will be a mutualised fund whereby, in effect, all compartments will contribute to any resolution. That is the thinking behind the framework.