Brian Hayes (Dublin South West, Fine Gael) | Oireachtas source

I move amendment No. 84:

In page 64, between lines 16 and 17, to insert the following:“Amendment of Central Bank & Credit Institutions (Resolution) Act 2011.

79.--(1) In this section “Act of 2011” means the Central Bank and Credit Institutions (Resolution) Act 2011.

(2) Section 10 of the Act of 2011 is amended--

(a) in subsection (2)--

(i) by deleting paragraph (a), and

(ii) in paragraph (b) by inserting “46,” after “42(5),”,

and

(b) in subsection (4) by substituting “Subject to section 11(3), the Bank” for “The Bank”.

(3) Section 11 of the Act of 2011 is amended by inserting the following subsection after subsection (2):

“(3) Notwithstanding section 10(4), the Bank shall from time to time pay interest at the rate determined under subsection (2) on monies standing to the credit of the Fund.”.

(4) The Act of 2011 is amended by inserting the following section after section 11:

“Accounts and audit.

11A.--(1) The Bank shall cause--

(a) to be kept for the Fund, in such form as the Minister approves, all proper and usual accounts of income and expenditure, and

(b) the transmission of those accounts not later than 3 months following the end of the financial year to which they relate to the Comptroller and Auditor General for audit.

(2) The Comptroller and Auditor General shall audit the accounts of the Fund transmitted to him or her under subsection (1) and shall prepare a written report in relation to those accounts.

(3) Within one month of the completion of the audit referred to in subsection (2), the Bank shall present a copy of the accounts and the report of the Comptroller and Auditor General on the accounts to the Minister who shall, as soon as may be, cause copies thereof to be laid before each House of the Oireachtas.”.

(5) The Act of 2011 is amended by substituting the following for section 12:

“12.--(1) The Minister, following consultation with the Bank, may contribute to the Fund such sums as the Minister considers appropriate, from the Central Fund or the growing produce of the Central Fund.

(2) The Minister is entitled to be reimbursed from the Fund for all contributions under subsection (1) together with any interest, at the rate determined under section 11(2), that may have accrued on those contributions at the rate determined.

(3) All sums paid out of the Fund in repayment of a contribution under subsection (2) shall be paid into the Central Fund.”.

(6) The Act of 2011 is amended by substituting the following for section 46:

“46.--(1) The Minister may, at the request of the Bank, agree to the provision, directly or indirectly, of a financial incentive, on terms and conditions that the Minister considers appropriate, to a person to become a transferee under--

(a) a transfer order, or

(b) where a transfer order has been varied under section 33, the transfer order as so varied.

(2) For the purposes of subsection (1)(a), the person to which the financial incentive is given may be a bridge-bank.

(3) A financial incentive may take the form of a payment, a loan, a guarantee, an exchange of assets or any other kind of financial accommodation or assistance, and may be or may include financial support within the meaning of the Act of 2008.

(4) Where the Minister agrees to the provision of a financial incentive under this Act and it is in the form of a payment or gives rise to a payment, the payment shall be made by the Bank from the Fund to such person as the Minister may direct.

(5) Where the Minister agrees to the provision of a financial incentive under this Act, a term of its provision may be in respect of the repayment in case of setting-aside of the transfer order, whether or not there is re-transfer of any assets or liabilities to the transferor.

(6) The amount of any financial incentive provided under this Act is a debt due and owing to the Bank for the account of the Fund by the transferor and may be recovered by the Bank for the account of the Fund as a simple contract debt in any court of competent jurisdiction.

(7) Any sum recovered by the Bank under subsection (6) shall be paid into the Fund.”.

(7) Section 47 of the Act of 2011 is amended in subsection (1) by deleting “or the Minister”.

(8) Subsections (1), (2)(b) and (3) shall be deemed to have come into operation on the coming into operation of the Act of 2011.”.

This amendment involves amendments to sections 10, 11, 11A, which is a new subsection, 12, 46 and 48 of the Central Bank and Credit Institutions (Resolution) Act 2011, more commonly known as the resolution Act. These amendments are designed to clarify and streamline the operation of the resolution Act. The resolution Act provides the permanent resolution regime in this State that allows the Central Bank to deal in an effective manner with credit institutions that are failing or are likely to fail into the future. It also provides that this will be done in a way that provides maximum protection for the Exchequer and provides confidence in the financial system as a whole.

The tools provided in the resolution Act to achieve these objectives are as follows: bridge banks; the ability to transfer assets and liabilities from failing banks; special management orders; modified liquidation processes specific to credit institutions; the formulation of recovery and resolution plans; and the establishment of the credit institutions resolution fund. The amendments to the resolution Act would provide that in the context of a transfer of the assets and liabilities of a credit institution in resolution, where the Minister has indicated his consent to a financial incentive that is in the form of a payment, the payment will be made on his direction by the Central Bank from the resolution fund established under the Act, rather than the Minister making a payment from the Central Fund, as currently envisaged in section 46 of the Act, which is subsequently recouped from the resolution fund. This will provide a more straightforward and streamlined procedure.

The amendments will also provide more comprehensively in regard to the payment of interest on moneys in the resolution fund and in regard to the preparation and audit by the Comptroller and Auditor General of the resolution fund's accounts.

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