The 18 finance ministers of the eurozone, including Minister for Finance Michael Noonan, will meet in Brussels today to try to agree on how failing banks should be wound-up.
It is a key component of the eurozone’s strategy of creating a banking union – the aim of which is to try to ensure, through tighter regulation, that the financial crisis does not happen again.
The main issue to be considered today by ministers will be what is known as the Single Resolution Mechanism – far reaching rules which would govern how banks should be wound up in the event of failure.
Ministers will first have to decide the pecking order in which bondholders and other creditors will lose their assets when a bank fails or is “bailed in”.
The other difficult issue facing ministers is to clarify how and when national governments will be obliged to sink taxpayers’ money into a failing bank.
It also seems likely that Ireland’s imminent exit from its bailout will come-up, if even informally.
Taoiseach Enda Kenny briefed at least ten EU heads of state in Paris on Tuesday.