I propose to take Questions Nos. 42 to 44, inclusive, together.
In relation to the first question above (ref: 38796/11), the Deputy will note that this matter was addressed in my reply to his previous parliamentary question on the subject (ref: 35901/11 of 22 November 2011).
With reference to the remaining two questions (refs: 38797/11 & 38798/11), I am advised by the Central Bank of Ireland, that the European Banking Authority applied the following key differences in methodology to the Irish banks relative to their European peers that participated in the 2011 EU-wide bank solvency stress test:
Loan loss forecasts:
The BlackRock Solutions output were used for loan loss forecasts as opposed to the predefined methodology. This resulted in significantly higher estimated stress case losses for Irish banks relative to their European counterparts.
Deleveraging:
The estimated impact of losses resulting from asset disposal activities scheduled to occur within the stress testing horizon were taken into account. This resulted in significantly higher estimated losses for Irish banks relative to their European counterparts. Deleveraging also resulted in a reduction of future estimated Risk Weighted Assets, and consequently future estimated regulatory capital, over the time horizon of the test, which was not allowed for other participating banks.
Funding:
Irish, Greek and Portuguese banks were issued with separate cost of funds instructions to account for the impact of the sovereign spreads and external support programmes.