The Minister for Finance has reiterated his position in relation to the repayment of the senior and subordinated debt of Irish banks, saying that he has "no plans to change his position."
A statement issued by the National Treasury Management Agency today said the Minister wished to "clarify" the position.
It said it issued the clarification following what it says is "uncertainty among market observers and participants about the intended treatment of subordinated debt in issue from Irish banks."
"In order to clarify the position the Minister has advised that prospective resolution and reorganisation legislation, insofar as it affects subordinated debt in issue, will apply only to such debt in issue from institutions which are not listed on a recognised stock exchange, are in 100 per cent State control and cannot survive in the absence of total State support," the statement said.
The Minister has "no intention to impose losses on holders of such senior debt in any credit institution in the State through any legislative measures", the statement said.
Mr Lenihan is to attend the annual meeting of the International Monetary Fund (IMF) in Washington tomorrow. From there, he will travel to New York on Sunday to hold meetings with investors.
Yesterday, the Financial Regulator appeared to leave open the possibility of negotiating a deal with senior bondholders who have lent to the banks to share some of the potential €50 billion bailout costs with the State.
Matthew Elderfield told an Oireachtas committee that a "liability management exercise" agreed by consent with senior bondholders in Anglo Irish Bank and Irish Nationwide Building Society was a possibility.
Mr Elderfield said other countries have "only extremely rarely" during the financial crisis imposed losses on senior bondholders under so-called resolution powers to deal with failed banks.
The Government should be "very cautious" about contemplating such a move, "never mind whatever legal and constitutional obstacles would need to be resolved", given the funding difficulties of the State and the banks, he said.
Last week Fitch downgraded the subordinated debt of AIB
