Aengus Ó Snodaigh
Question:22. Deputy Aengus Ó Snodaigh asked the Minister for Finance the reason Irish banks are facing earlier stress tests than other EU banks; and his views on what the results of those tests might reveal. [41501/13]
View answerThursday, 3 October 2013
Questions (22)
Written answers
Originally our programme of support envisaged another stress test, or PCAR, that was to take place in tandem with similar exercises across Europe. When these tests were postponed a new position was agreed with the Troika. Hence, in preparation for the timely introduction of the Single Supervisory Mechanism (SSM), the Central Bank of Ireland (CBI), in consultation with staff of the EC, ECB and IMF, will now conduct a stress test in accordance with the new EU methodology ahead of, and in close proximity to, the upcoming SSM exercise. The intention is to ensure that appropriate preparations are made early so that the Irish banks are in the strongest possible position to achieve the key goal for Ireland of a smooth entry into the SSM in 2014.
Consequently the Irish authorities have agreed with the Troika that detailed preparatory work required for the stress test will be completed in 2013. The Central Bank of Ireland, in consultation with the Troika, will conduct a series of diagnostics to provide greater clarity regarding the underlying quality of banks’ balance sheets. A key element will be a comprehensive Balance Sheet Assessment to be finalised by end-November 2013. It would not be appropriate to prejudge the outcome of this assessment and it should be noted that Irish banks remain well capitalised.