Monday 18 December 2017

Troika paper will extend to the wider restructuring of Irish banks

Laura Noonan

Laura Noonan

THE "technical paper" being worked on by officials from the EC/ECB/IMF bailout team extends to the wider restructuring of the Irish banking system and not just ways to lower the cost of Anglo Irish Bank's €30bn bailout.

The news comes after senior officials from the so-called troika jetted back into Dublin this week for talks with the Department of Finance on ways to enhance Ireland's bank restructuring.

The main issue before the officials is a proposal to re-engineer Anglo's bailout so the State is no longer compelled to pay down the IOU (and its interest) at a rate of €3bn a year for about 15 years.

It is understood that the paper is likely to also encompass wider issues, such as the future of Irish Bank Resolution Corporation (formerly Anglo), ways to deal with various banks' tracker mortgages and options to deal with Permanent TSB.


The troika believes that all the elements are interconnected since they go to the heart of the sustainability of Ireland's reformed banking sector.

A spokesman for the department last night said that his officials and the bailout teams were in "constant and ongoing dialogue".

"Further technical level meetings were held with the troika in Dublin this week," he added.

Asked whether the technical paper would also encompass wider banking issues, he said "any solution" to deal with the Anglo IOUs "must be consistent with the orderly resolution of IBRC already under way".

The technical paper is expected to be completed by the end of February.

It is likely to suggest replacing Anglo's existing IOUs with bonds granted by Europe's bailout fund, either the existing EFSF or the ESM, which comes into being in July.

Under one model, these bonds could be redeemed by Anglo over a relatively short time and the Irish State could then repay the EFSF/ESM over a longer period.

Involvement from the EFSF would need the support of 17 eurozone countries, while the ESM involves all 27 European Commission member states.

Irish Independent

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