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THE BONDHOLDERS owed money by struggling Eurozone banks would be forced to accept mandatory losses if the institutions faced solvency trouble, under plans being put forward by finance minister Michael Noonan.
A three-page memo circulated by Noonan to his counterparts from around the EU – a copy of which has been published by the Financial Times – would mean mandatory losses for the holders of a bank’s bonds, and for some of its shareholders.
Only 5 per cent of a bank’s total liabilities – the amount it owes – could be excluded from the ‘bail in’ scheme, where a bank’s creditors would have to accept losses on their loans.
Beyond that, creditors would be forced to absorb the bank’s losses – with the banks refusing to repay the bonds, instead taking the money to add to its own capital reserves.
Funds could only be excluded after 8 per cent of the bank’s liabilities had been “bailed in”, but the precise hit that each creditor would take would be relayed to the size of the institution’s total liabilities and the size of any other funds available to save the bank.
A “national resolution authority” (in essence, a national government) would have the power to use “other funding arrangements” to recapitalise a bank – but any recapitalisation would be “subject to additional strict conditionality” including needing prior approval from the European Commission.
The Financial Times said the memo had been circulated towards the end of last week’s marathon talks in Brussels, where ministers tried – and failed – to polish off an agreement on exactly who should foot the bill for saving troubled banks in future.
Another meeting has been scheduled for Wednesday, as Noonan – who chairs the meetings of the ‘Ecofin’ group under Ireland’s EU presidency – keen to reach agreement before the presidency moves to Lithuania next Monday.
Ireland has already spent €64.1 billion saving its own banking sector, with another round of stress tests early next year set to indicate whether more state aid might be needed for the country’s troubled lenders.
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The things people get compo for and then there’s this! Just give them the money and let them have a bit of comfort fgs
@Patricia Ellis Dunne: Yes, these women do deserve compensation. Last week a survivor of clerical abuse was hospitalized after going on hunger strike in protest at the trauma inflicted on survivors by Caranua, the state redress authority. When are FF-FG going to start to treat these people as decently as they claim to treat them when they’re giving speeches in the Dail?
Wouldn’t be like the State to do something like that at all now would it!? Sometimes I really really dislike this country.
@Arnold Alley: I can’t disagree with that, I really meant Official Ireland to be honest
How thoroughly Christian of them.
And the church’s marketing team has just pulled off ‘Red Wednesday’ where cathedrals around the world are lit up in red in aid of “justice and victims of suffering”. Practice what ye preach ye hollow, defunct crowd of hypocrites.
Rants McCrank:The decisions to deny redress was done by the organs of our State in our name ,we are all responsible.
@Brian O Reilly: no we are not all responsible. I did not abuse or ill treat anyone and I don’t see why me and my children, through borrowed money for compensation, should have to pay. Your decision and opinion to centralize the liability for all wrongdoing to all citizens is a dream for the legal profession.
@Ranty McCrank: Its a pity the fathers can’t be found and the pensions/estates used to fund this. Remember when lovely auld Johnny dies and leaves the house to Mary & Paddy but unknown to them Jimmy is being denied a share.
@lavbeer: Presumably he would have a will leaving it to who he wants.
So 27 people would get on average a € 82,000 payout,which = 2.214 m
Around 2 million Irish people are paying taxes
That means it will cost me about €1
I’m livid at that loss..How will I cope!!
@Francis Mc Carthy: That’s for this incident alone and 27 people. They are all adding up and increasing in payment amount. If the 1 in 4 stat for abuse is true then 1.25 million people could claim for “redress”. That is €102 billion. Indeed how will we cope. We truly are a failed state with no true leadership. All divided and fighting for scraps.
So who will be Who’s redressing them? Dumped in the taxpayer again? Decisions like this to garner votes from lobby groups may please those members but the working people remember the politicians that are making innocent workers financially liable for the grave misconduct of others.
Why can’t the state sue the Vatican. To get the compensation money back? The way it is. it’s the taxpayer paying the compo!
The DJE is an appallingly bad and oppressive Government Department. It is a law unto itself.
Kudos to the Ombudsman for standing up to Fine Gael on this one.
Stop the prevarication and cough up the dough.
That’s what happens when you combine corruption, nepotism, cronyism, ineptitude and a blatant lack of any kind of morals or dignity!
Shameless crooks running the Banana Republic of Ireland but people care more about the soccer team getting hammered by the Danes!
Its kind of hilarious these days the way women come out with these #metoo stories about how a man grab their arse or tits and the whole world cries for them while the mans career is ruined. meanwhile people have been screaming from the roof tops for decades about the abuse the catholic church carried out in this country and there’s hardly a word about it and 0 justice
@Alfred Pennyworth:
Just do not forget that many a woman’s life was ruined because the fathers of their children abandoned them and that is why they ended up in these awful Laundries. It is the State that is now denying these women the compensation that they deserve to get without delay so they can at least feel that their suffering will be recognized. But no the State could not wait to give the Banks who ruined the country Shedloads of money but they make the women beg for the crumbs .
Flannagan reminds me of Noonan when he dragged dying people into court in the attempt to save the state money and cover up a deadly mess in the blood transfusion scandal.
@Donal Desmond: this happened long before Flanagan became Minister. Get a grip. It’s a review of an administrative scheme.
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