IRELAND Law and Practice Contributed by: Keith Robinson, Barry Tyrrell and Julia Mullin, Dillon Eustace LLP
To implement a resolution tool, the CBI is required to obtain a resolution order. A resolution order can cover a number of different transac - tions to give effect to the relevant resolution tool, including: • the transfer of shares; • the transfer of assets and liabilities; • the reduction of principal under a capital instrument; • the cancellation of debt instruments (other than secured liabilities); • the close-out or termination of financial con - tracts; and • the removal and replacement of management by a special manager. The BRRD Regulations and the SRM Regulation aim to implement the “Key Attributes of Effective Resolution Regimes for Financial Institutions”. The CBI issued an approach paper called “Cen - tral Bank of Ireland’s Approach to Resolution for Banks and Investment Firms (Second Edition) October 2021” (the “Approach Paper”), which outlines the Central Bank’s resolution man - dates, powers and available discretions and its approach to resolution under various pieces of legislation including the SRM Regulation, CRR and the BRRD Regulations. The Approach Paper applies to credit institutions within the scope of the BRRD Regulations that are less significant institutions (“LSIs”) and are not part of a “cross- border group” as defined in the SRM Regulation and certain other prescribed entities, within the SRM, where the CBI has principal responsibility as resolution authority for resolution decisions. The Approach Paper, notes that while there are several ways in which bank failures can be addressed the most likely approach for the majority of failing institutions is through a CBI-
involved winding-up (liquidation) procedure involving a petition by the CBI to the Irish High Court to wind up the relevant institution. Deposits The DGS provides protection for eligible deposi - tors of a bank authorised by the CBI if that entity is unable to repay its deposits. As outlined in 6.1 Deposit Guarantee Scheme (DGS) , the pro - tection is limited to EUR100,000 of an eligible deposit per person in a bail-in scenario. The BRRD Regulations also amend the Companies Act 2014 to afford a preference to certain depos - itors over unsecured creditors in the scenario where a BRRD institution is liquidated. In recent years, ESG matters have become more prominent in the Irish banking and financial sec - tors. As a member of the EU, Ireland has an obli - gation to abide by EU-wide regulations and poli - cies which focus on ESG issues. There has been a movement in the EU towards transparency and responsibility by all banks and credit firms in the financial services industry. EU Sustainable Finance Disclosure Regulation 9. ESG 9.1 ESG Requirements The primary source of ESG-related banking reg - ulations in Ireland stems from the EU Sustain - able Finance Disclosure Regulation (the “SFDR”) which came into effect in 2021. The SFDR aims to increase transparency in the investments sector in relation to sustainability. It sets out a new set of disclosure requirements applicable to financial market participants, including banks in Ireland.
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