Essential pillar of Banking Union and agreement tonight will see "bail-out" replaced with "bail-in". Agreement will now allow negotiations to start with the European Parliament. Agreement also sets out effective resolution rules that will help us avoid and better weather any future banking crises
Ireland's Minister for Finance, Michael Noonan TD, has tonight (26 /27 June 2013) brokered agreement with EU Finance Ministers at the ECOFIN Council on the rules for Banking Recovery and Resolution.
Speaking about the agreement Minister Noonan said:
"During the financial crisis, there was no single set of tools available to members states to deal with failing banks and we saw varying reactions across Europe. In many cases, European taxpayers were forced to step in to bail out private banks with devastating consequences. This agreement will effectively move us from ad hoc "bail-outs" to structured and clearly defined "bail-ins" as the rule. Therefore, in the event of future banking failures taxpayers will be protected."
Progressing the building of a Banking Union was given the highest priority by the Irish Presidency of the ECOFIN Council and tonight's agreement represents a very good outcome to our deliberations on a key pillar of Banking Union
Minister Noonan said:
"We must break the vicious link between banks and sovereign and the Irish Presidency has prioritized files over the past six months that deliver on this objective and build a banking union.
"We have been successful in this area having reached agreements with the European Parliament on capital requirement for rules for banks - CRD IV - and the setting up of the Single Banking Supervisor - SSM.
Minister Noonan - "Banking Recovery and Resolution is the next building block and agreement tonight comes at an important time for the banking union project and represents a very positive conclusion to the Irish Presidency. This agreement will now allow negotiations to start with the European Parliament on the next pillar"
Tonight's meeting marked the end of Ireland's Presidency of the Ecofin Council.
Minister Noonan said:
"I would like to thank my team for all of their hard work throughout the Presidency. I am sure I speak for all of them when I saw it was a great honour to hold the Presidency of this important Council and I am very proud of what we have achieved over the past six months."