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Mr Noonan said the State would be eligible for the scheme if it holds one more debt sale. “It seems to me that if we had one more sale of Irish paper, we would be eligible for OMT.” He said it was “something we will consider, certainly”, adding that the scheme had had a “major effect on bond spreads across Europe".
The Irish presidency, which is representing the European Council in discussions, favours a depositor-preference system where uninsured depositors of over €100,000 would be the last in line to be “bailed in” in the event of a bank wind-down. Some Member States believe the proposals are too prescriptive and want states to have greater discretion in implementing the bail-in tool.
Mr Noonan said he was confident progress would be made on banking union. “We’ve done a lot of pre-meeting work so I’m fairly confident that we’ll have a very full discussion, a full political debate. It’s not a debate to arrive at precise decisions; it’s a debate to move the project forward to the next stage.”
Under the Irish presidency’s compromise proposal, countries will be required to set up national resolution funds to cover wind-ups of troubled banks, equating to 0.5 per cent of covered deposits of the financial institutions. Institutions would have to make annual contributions based on their liabilities.