Irish Banks - New Stress Test

Bex8814 By Bex8814, 18th Mar 2014 | Follow this author | RSS Feed | Short URL
Posted in Wikinut>News>Politics

The new stress tests for Irish banks, what will they involve and are Ireland confident?

ECB Stress Tests for Irish Banks

The Irish Minister for Finance, Michael Noonan, gave a speech in Brussels yesterday (12-03-14) regarding the ECB Stress Tests that are to be introduced within the banks of Ireland. Mr Noonan says he is optimistic that Irish Banks have the ability to withstand the stress tests, and says they have been through tougher tests previously.

The three main Irish banks - Bank of Ireland, AIB and TSB, will be under much scrutiny for how they perform during the tests. The system is said to be intrusive enough to ensure that the confidence is restored globally amongst the banks investors. If any of the banks do fail the stress tests than their recapitalisation will then become the Governments responsibility. Michael Noonan spoke about how confident he was that all of the banks would make it through these tests.

The tests will investigate around 1,250 credit files within each bank, and assess over 58% of risk-weighted assets, which is thought to be the equivalent to near 3.7 trillion euros in financial value. The work will be done by the auditors of the national banks, with the ECB monitoring the process closely. Each bank will be expected to look into up to 20% of it’s portfolio, and the results will be released next October by the European Banking Authority. If there are any problems, considered to be of significant level, that emerge then these will be highlighted immediately during the assessment.

The ECB published a 285 page manual for the test, there is sure to be nothing overlooked with this detailed test but Ireland is unconcerned, according the the Minister of Finance. With the recession of 2008 the banks of the world were hit hard, with more non-performing loans than for many years due to people who had borrowed simply being unable to pay back. The recession hit Ireland hard. During the test non-performing loans are to be of high priority and with new definitions of what non performing loans are - any loan which is overdue by more than 90 days will be categorised as non performing.

Some of the results of tests which occurred around Europe have already been published with the Italian bank UniCredit revealing a record loss of over 14 billion euros loss for last year, as it took huge write downs ahead of the stress tests. Many other Italian banks are due to publish results today.


Bank, Banking System, Banks, Ireland, Irish, Test, Tests

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Mother of 3 - Writing focusing on personal experiences and information I have learnt regarding business, children, animals, immigration, places as well as current media stories from different angles

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