Thomas Pringle (Donegal South West, Independent)
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149. To ask the Minister for Finance the approach of the Irish Government to current proposals encompassing the ECB, the European Commission, the national Governments of the 28 Union and l7 Eurozone states in regard to a mechanism for the Financial Supervision of the Euro and the establishment of a Single Financial Resolution mechanism for the Euro; and if he will make a statement on the matter. [36918/13]

Michael Noonan (Limerick City, Fine Gael)
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In May 2012 the Commission called for a banking union to restore confidence in banks and in the euro. This was reflected in the report on Economic and Monetary Union prepared by the Presidents of the European Council, the Commission, the Eurogroup and the European Central Bank. A complete banking union requires common supervision, deposit insurance, a common resolution framework and a common fiscal backstop. Earlier this year the first part of the Banking Union was put in place following agreement on the proposal for common supervision, the Single Supervisory Mechanism (SSM). The SSM will apply to the 17 euro-area Member States and is open to the non-euro-area Member States who wish to participate.

Following the adoption of the SSM the European Council called for the creation of a Single Resolution Mechanism (SRM) for banks covered by the SSM. This follows from the principle underpinning the banking union that where supervision is centralised it should be complemented with a centralised resolution authority. The SRM proposal consists of the Single Resolution Board and a Single Resolution Fund, financed by contributions from the financial sector. For legal reasons (as supervision is exercised by the ECB, resolution should be exercised by the same level of authority), the Commission will take the final decision to trigger resolution and the use of a single resolution fund. The SRM will apply the resolution tool-kit in line with the Bank Recovery and Resolution (BRR) proposal which is currently being negotiated at trilogue level.

Under, the proposal, a Single Resolution Board (SRB) would prepare and carry out the resolution of any bank in a Member State participating in the Banking Union. It would have broad preparatory powers and be responsible for the key decisions on how a bank would be resolved. The Board will involve the representatives of national resolution authorities of participating Member States, the ECB and the Commission, as well as an Executive Director and a Deputy Executive director.

I am working with ministers from the other Member States at the ECOFIN Council to bring about the SRM. My officials are engaged in technical negotiations on the proposal. Ireland welcomes the proposal for the SRM as the next essential step to complete the banking union. It will assist in achieving the objective established by the Heads of states and governments of breaking the link between the sovereign and the banking sector. It should apply to all banks in the participating Member States and have a credible backstop to ensure that national budgets are not exposed by decisions of the SRB.