The Government has published new proposals to allow the Central Bank to deal with lenders that are "failing or likely to fail".

Under the proposed resolution, the Central Bank would have the power to transfer assets or to wind down lenders.

The Central Bank and Credit Institutions (Resolution) (No. 2) Bill 2011 also provides the framework for the introduction of a bank levy.

The Bill is essentially the same as the one published in the Seanad in February, following the dissolution of the previous Dáil ahead of the general election. 

Minister for Finance Michael Noonan said the publication of the Bill was an "important step" in ensuring the Central Bank could deal with financially troubled banks promptly and effectively.

"The purpose of the bill is to provide for a 'main stream' long term special resolution regime for credit institutions in the State," he said. "I am preparing committee stage amendments to the Bill, which are designed to enhance the resolution toolset in line with the evolving EU principles on crisis resolution and in the light of discussions with the external partners."

The powers laid down in the bill will apply not only to banks but also building societies and credit unions. Under the proposals, the Central Bank will be able, through a High Court order, to transfer some or all of an institution's assets and liabilities to another institution. The bill also covers the establishment of a "bridge bank" to temporarily hold some or all of an institution's assets or liabilities that may be transferred.

The proposals give the Central Bank the power to seek the appointment of a special manager to to either help the institution recover, or wind it down.