Discussion on Single Resolution Mechanism on Ecofin agenda

Michael Noonan says SRM an essential step in creating a banking union

Minister for Finance Michael Noonan said the Single Resolution Mechanism was an essential step in creating a banking union

Minister for Finance Michael Noonan said the Single Resolution Mechanism was an essential step in creating a banking union

Thu, Feb 13, 2014, 15:51

Progress on the introduction of a Single Resolution Mechanism (SRM) will be among the topics under discussion by finance ministers at the forthcoming Ecofin meeting to be held next week.

Appearing before a select committee today, Minister for Finance Michael Noonan described the SRM as a “priority issue” for Ireland.

A German-led group of countries recently mooted the possibility of a gradual phasing out of the ESM direct recapitalisation instrument once the €55 billion SRM fund is established. This has caused concern locally despite officials playing down the impact any potential review clause might have on Ireland’s bid for retroactive direct recapitalisation.

Mr Noonan said the Single Resolution Mechanism was an essential step in creating a banking union.

“While there is a divergence of opinion between the council and parliament on some issues such as scope, financing and governance, the presidency will work to move forward on this issue with, if necessary, a revised mandate, “Mr Noonan told committee members.

Mr Noonan said while rules regarding the tax treatment of interest incomes was among the other items scheduled for discussion at next week’s meeting, he expected this to be postponed until a later date.

Elsewhere, NTMA chief executive John Corrigan yesterday told the Committee of Public Accounts that the agency plans to raise about €4 billion through a series of bond auctions over the course of the year with indicative sizes ranging from €0.5 billion to €1 billion.

He also said work to facilitate the National Pensions Reserve Fund’s (NPRF) transition into the Ireland Strategic Investment Fund (ISIF) was ongoing.

The Government announced plans last June to redirect €6.8 billion in funds from the NPRF to the new fund for investment in infrastructure and commercial projects.

“Work on the ISIF business plan is at an advanced stage. Already, in anticipation of the NPRF’s transformation... we have been working hard to develop a pipeline of potential investments, said Mr Corrigan.

“A number of these have been concluded and as a result, the NPRF now has €1.3 billion invested or committed to areas of strategic importance to the Irish economy including infrastructure, venture capital and long-term financing for SMEs,” he added.