Róisín Shortall (Dublin North West, Labour)
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Question 12: To ask the Minister for Finance the progress that has been made with preparations for the introduction of a special resolution regime for Irish banks; and if he will make a statement on the matter. [34044/10]

Kieran O'Donnell (Limerick East, Fine Gael)
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Question 141: To ask the Minister for Finance if he intends bringing in a bank resolution scheme; the details of such a scheme; when such a scheme will be introduced by way of legislation; if it will be confined to specific financial institutions and the names of same or will it be a general bank resolution scheme; and if he will make a statement on the matter. [34307/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I propose to take Questions Nos. 12 and 141 together.

I have indicated previously that I am examining options for the introduction of a legislative regime to deal in a systematic way with distressed financial institutions, to ensure the State has in place a range of tools to address problem institutions effectively in the interests of maintaining financial stability, minimising reliance on public moneys and ensuring continuity of key banking activities.

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 draft legislative proposals, which I will consider in due course. This of course is a complex area where policy is still evolving internationally and I want to ensure that any model introduced in an Irish context meets best international practice.

Work is also under way at the EU level in this area. The European Commission is working to develop an EU framework for cross-border crisis management. With the objective of ensuring that Member State authorities have the necessary common tools that can be used in a co-ordinated manner to allow prompt and legally robust actions in the case of bank failures, protecting the broader financial system, avoiding costs for taxpayer and ensuring a level playing field. Also included in the Commission's proposal for discussion are additional powers for supervisors to require the preparation by systemically important institutions of firm-specific contingency and resolution plans. A Communication is expected from the Commission in October 2010, setting out the timetable, concrete measures and plans for an EU framework for crisis management with legislative proposals expected in Spring 2011. Ireland is, of course, participating fully in the work at EU level to examine possible elements of bank resolution tool-kits in a cross-border context. My proposals in this area, while not needing to await developments at EU level, will be informed by the debate and considerations in that forum.

As I set out in my statement this morning, in addition to the work outlined above, my Department in conjunction with the Attorney General is working on resolution and reorganisation legislation, which will enable the implementation of reorganisation measures specific to Anglo Irish Bank and INBS which will address the issue of burden-sharing by subordinated bondholders. The legislation will be consistent with the requirements for the measures to be recognised as a re-organisation under the relevant EU Directive in other EU Member States.