ECB and Noonan clash over burning bondholders
Published 15/07/2011 | 05:00
THE European Central Bank yesterday categorically ruled out allowing Ireland to force any losses on the banks' senior bondholders -- just hours after Finance Minister Michael Noonan said he planned to raise the issue in the autumn.
The comments from the ECB's top man in Ireland, Klaus Masuch, came as he mounted a spirited defence of the ECB's role in the Irish crisis, despite the hardship triggered by rising interest rates.
Mr Noonan wants to force losses on investors who own €3.5bn of 'senior' bonds in Anglo Irish Bank and Irish Nationwide.
The Finance Minister said yesterday he planned to raise the issue with the ECB and other bailout partners in the autumn, but Mr Masuch ruled out any negotiations.
Asked whether he would "hear the minister out", Mr Masuch said there had been "no change" to the ECB's position.
"We regard the idea to burn senior bank bonds as very risky to Ireland, as undermining confidence in the Irish banking sector," he stressed.