Willie Penrose (Longford-Westmeath, Labour)
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Question 104: 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. [41630/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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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. This is 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. My Department is working with the Central Bank of Ireland to examine the policy issues arising in this area with a view to the development of draft legislative proposals. There are some significant legal and constitutional issues that need detailed assessment in advance of the finalisation of legislative proposals for consideration by the Government. This work is in addition to work underway by my Department and the Office of the Attorney General on resolution and reorganisation legislation, which will enable the implementation of reorganisation measures specific to Anglo Irish Bank and INBS to address the issue of burden-sharing by subordinated bondholders. The Deputy mat wish to note that the development of a special resolution regime is a complex area where policy is still evolving internationally and it is important to ensure that any model introduced in an Irish context meets best international practice. In that regard I welcome the European Commission's recent Communication on an EU framework for crisis management and look forward to its legislative proposal in spring 2011. The discussion on this issue at EU level will of course inform our domestic consideration of this matter.