The legislation to put in place a special resolution regime for banks and give the governor of the Central Bank the power to intervene in their affairs is to be published today, the Irish Times reported.
The new Dáil sits on March 9th and the new government will have to decide on a timetable for the enactment of the legislation.
A commitment to the publication of such a piece of legislation was contained in the agreement between the Government and the EU-IMF, signed in December.
The new law will be used to intervene in the affairs of distressed financial institutions and will replace the Credit Institutions (Stabilisation) Act, introduced late last year. The new Bill will give powers to the governor of the Central Bank, Prof Patrick Honohan, which are delegated to the minister for finance in the Credit Institutions Act.
The EU-IMF deal with the Government said legislation on improved procedures for early intervention in distressed banks and a special bank resolution regime (SRR) would be introduced.
“The SRR should include a robust set of powers and tools to ensure the competent authorities can promptly and effectively resolve distressed banks, eg, when they pose a risk to financial stability. The legislation will be consistent with the EU treaty rules and will be consistent with similar initiatives ongoing at EU level,” the agreement stated.
In December, the Government committed to publish the law by the end of February and that it would broaden the available resolution tools with the aim of promoting financial stability and protecting depositors. Read more.
