Brian Lenihan Jnr (Dublin West, Fianna Fail)

The question of a bank resolution mechanism was also raised. The global financial crisis has revealed the significant challenges that arise for countries when there is a necessity to deal quickly and effectively with distressed financial institutions. Special resolution regimes for the financial sector are recognised as a key method of reducing the impact of the distress or failure of individual financial institutions. For our part, I indicated in the course of the NAMA Bill debate that I would examine options for the introduction of a legislative regime to deal in a systematic way with distressed financial institutions. The objective of such a regime would be to ensure that the State has in place a range of tools to protect deposit holders and ensure that problem institutions can be dealt with effectively in the interests of maintaining financial stability.

In view of the central role performed by central banks in resolution frameworks for financial institutions, my Department is in consultation with the Central Bank and the Financial Regulator with a view to the development of suitable options for progress in this area, including draft legislative proposals.

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