Eoghan Murphy (Dublin Bay South, Fine Gael) | Oireachtas source

In this regard, it should be noted that Ireland's key is 3.3% of the €55 billion which equates to €1.815 billion. During the negotiation of the loan facility agreement, two issues emerged, namely, whether it should be possible to pay a credit line in tranches than all at once and whether national approval was required to pay a credit line to the Single Resolution Board. If member states were willing to forgo flexibility on these two points, the board would pay an annual fee of 0.1% of its credit line.In the case of Ireland, this fee, otherwise known as a commitment fee, would equal €1.8 million per annum. The Minister for Finance consulted the NTMA on this point and it advised that the flexibility allowing the State to pay the loan in tranches over a 19-day period, except in exceptional circumstances, is worth the forgoing of the commitment fee. In addition, the credit line will require national approval, which will ensure there is appropriate national oversight.

This Bill also provides for an amendment to the Companies Act 2014. These amendments are required owing to the need to transpose the European market abuse regulations and the market abuse directive into Irish law. On legal advice, the Minister for Finance, Deputy Michael Noonan, introduced an amendment to the Companies Act 2014 on Committee Stage of this Bill to refer explicitly to the new European market abuse regime in section 1,365 of that Act. This will ensure the continuation of the existing offences and high-level penalties - on indictment, of up to €10 million in fines - or up to ten years' imprisonment, or both, for insider trading and market manipulation.

I will now give a more detailed overview of the main provisions of the Bill. The Bill is short, consisting of ten sections, and captures the key points of the loan facility agreement between the State and the Single Resolution Board. Section 2 provides that the Minister for Finance can perform any functions necessary for the purpose of the State's performing its functions under the loan facility agreement. Section 3 provides that any decision to amend the terms of the loan facility agreement shall be laid before each House of the Oireachtas. If a resolution annulling the amendment is passed by either House within 21 days on which the House has sat, the amendment shall be annulled accordingly and without prejudice to the validity of anything previously done thereunder.

Section 4makes clear that the sum specified in the loan facility agreementcannot be altered without the prior approval of both Houses of the Oireachtas.Section 5 sets out the circumstances where the Exchequer may make a payment of money to the Single Resolution Board. Section 6 sets out the legal basis for facilitating a payment by the Single Resolution Board to the State. Section 7 requires the Minister for Finance to provide a report to the Dáil with information on the value of any loans and repayments made. If a payment of a sum under section 4 is made to the Single Resolution Board, a statement of the amount payable must be laid before the Dáil within one month of the date of the payment.

As previously outlined, section 8 amends the Companies Act 2014 to refer explicitly to the new European market abuse regime in section 1,365 of that Act. This will ensure the continuation of the existing offences and high-level penalties for insider trading and market manipulation.

Section 9 enables any expenses incurred by the Minister for Finance regarding this Act to be covered by moneys provided by the Houses of the Oireachtas.

I will now outline the main paragraphs of the terms of the loan facility agreement, which is the Schedule to the Bill. Paragraph 2 states the maximum amount of the loan is €1.815 billion and the purpose for which the loan may be used. Paragraphs 4 and 5 set out how the Single Resolution Board must apply for the loan, the details of the loan, the timeframe for the lender to respond and the making of the loan.

Paragraph 6 sets out the conditions around repayment of the loan and that, in circumstances where not enough ex postcontributions have been made to repay the loan in two years, the loan may be extended by one year. Paragraph 7 sets the out the conditions on the prepayment of a loan. Paragraph 8 sets the conditions for the setting of the interest rate on the loan.

Paragraph 9 states no commitment fee shall be payable by the Single Resolution Board to the State. As I stated, the Minister for Finance chose to forgo a commitment fee of 0.1%, or €1.8 million, per annum in return for greater flexibility, after consultation with the NTMA. In return for forgoing the commitment fee, the credit line will require national approval rather than being automatic. It also has the benefit that the State can pay the loan amount in tranches over a 19-day period, bar in exceptional circumstances where the Single Resolution Board needs to avert the immediate default of an entity under resolution and would require more than 50% of the loan facility agreement.

Paragraph 11 describes the information-sharing requirements and sets out that the State should inform the Single Resolution Board if any event occurs that may prevent it from fulfilling its obligations under this agreement. It also allows the State, the Single Resolution Board, the European Commission and the European Stability Mechanism to exchange information relevant to this agreement where the State has requested or received stability support.

Paragraph 12 contains a provision that national approval must be sought by the State within three days of a pre-notification request from the Single Resolution Board and outlines a number of procedural items in regard to the operation of the agreement.

Paragraphs 14 to 18 set out various technical provisions, such as payment mechanics, confidentiality agreements, interest calculations and disclosure requirements. Paragraph 19 sets out how the State may pledge security for the European Stability Mechanism in the event that the State enters stability support.

I re-emphasise the importance of the early passage of this Bill to enable the implementation of significant parts of the EU banking union legislative agenda. It will also ensure that Ireland meets its banking union obligations as agreed with other member states involved in banking union. In addition, the amendment to the Companies Act will ensure Ireland maintains a robust regime against market abuse, with high levels of penalties, both in fines and custodial terms. I commend the Bill to the House.