The Minister for Finance was reiterating Government policy on burden-sharing for senior bondholders in his comments about saving Irish taxpayers’ money, Tánaiste Eamon Gilmore told the Dáil today.
In Washington yesterday, Michael Noonan said he had the support of the International Monetary Fund for a plan to seek a substantial discount from senior lenders on about €3.1 billion of Anglo Irish Bank debt and €600 million of Irish Nationwide debt.
“The Minister expressed the Government position on which we have been absolutely consistent which is that the burden on the Irish taxpayer for the losses that have been incurred by the banks must be minimised,” Mr Gilmore told TDs this morning.
"He has made it clear that that’s a matter that will be discussed with the European Central Bank in particular and with the European Commission. The issue of legislation required to implement will obviously follow those discussions.”
The Tánaiste was responding to Sinn Féin deputy leader Mary Lou McDonald, who said she hoped Mr Noonan’s comments were a “mark of a realisation in Government that senior bondholders have to be dealt with, rather than a stunt to mark your 100 days in office”.
She had asked when will the legislation required for such burden sharing be brought before the House “given that the Credit Institutions Stabilisation Act of 2010 doesn’t provide for it”.
Ms McDonald, who called on the Government to extend the burden-sharing to all covered institutions, told Mr Gilmore that she hoped “your efforts in respect of burden-sharing will meet with much greater success than your failed efforts to get a reduced interest rate on the deal”.
The ECB opposes the burden-sharing because of concerns that all European banks would be considered riskier if any EU bank failed to pay senior bondholders. However Mr Noonan said believed however that imposing losses on Anglo and Irish Nationwide would not be seen as such because it was no longer a real bank because it did not take deposits or give loans. The two institutions were merged and it was a "warehouse for impaired assets".