Key reasons and new powers outlined in publication of Bill

 

Key details and the reasons behind the Irish Bank Resolution Corporation Bill 2013 were published late last night.

The Bill is designed to "help address the continuing serious disturbance in the economy of the State" as well as to "protect the interests of taxpayers".

It will provide for the winding up of IBRC in "an orderly and efficient manner in the public interest" as well as bring an end to the exposure of the State and the Central Bank to IBRC.

This will be done via a "special liquidation order", which Minister for Finance Mr Noonan must order "as soon as is reasonably practicable" which will wind up the bank.

The Bill will "help restore the financial position of the State", as well as assist the State in re-establishing what it termed "normalised access" to the international debt markets, which the country has been frozen out from since entering the Troika's bailout programme.

The Bill will also seek to assist "to the extent achievable" the recovery of the financial assistance provided by the State to IBRC "as fully and efficiently as possible."

Additionally, a key purpose of the Bill is to resolve the debt of IBRC to the Central Bank and to restore confidence in the banking sector by "furthering the reorganisation of the Irish banking system in the public interest".

Transfer of assets

The Bill is intended to "underpin Government support measures" in relation to the banking sector and will provide for the sale or transfer of assets and liabilities in the bank.

It also provides for an immediate stay on all proceedings against IBRC and no further action can be issued against the bank without the consent of the High Court.

The family of Sean Quinn are pursuing a high-profile action against the bank over the legality of €2.3 billion in debts due to the bank.

For its part IBRC is taking a number of actions against prominent developers over recovery of debts.

The Bill also constitutes notice of the "termination of employment for each employee in IBRC with immediate effect".

The Minister for Finance may issue instructions and directions to the special liquidators who are compelled to comply with him.

Among the many powers given to the Minister for Finance in the Bill is one which allows him to discharge or remove any liquidator or examiner that had been appointed to IBRC prior to the making of the Special Liquidation Order.

The Bill will also limit the power to grant injunctive relief in certain proceedings.

The Minister for Finance may also give direction in writing to the National Asset Management Agency (Nama) in relation to the acquisition by Nama of the debt of IBRC to the Central Bank, as well as in relation to the purchase of assets of IBRC from the special liquidators.