Ireland working on "novel" promissory note solution-c.bank

DUBLIN Wed Jan 16, 2013 9:41am EST

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DUBLIN Jan 16 (Reuters) - Ireland will need a "novel" solution that does not take policymakers too far out of their comfort zone if it is to reach a deal with the European Central Bank on restructuring part of its bank debt, its central bank governor said.

"Taking into account both the statutory position and wider policy stance of the ECB, an initiative of this type will be novel and as such challenging," Patrick Honohan told a parliamentary committee, referring to negotiations on the so-called "promissory notes" pumped into two failed Irish banks.

"We have been working carefully to build understanding and confidence around a set of proposed transactions designed to deliver for Ireland, while not taking other decision makers too far out of their comfort zone.

"In fact, what we have designed is, I believe, largely in the interests of the eurosystem as a whole."

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