Dáil Éireann Debate, Tuesday - 8 April 2014
33. Deputy Mattie McGrath asked the Minister for Finance if he will provide an update on any consultation that has taken place between Professor Morgan Kelly and the Central Bank in view of Professor Kelly's recent comments on the relationship between banks and the debt in the small and medium enterprise sector; and if he will make a statement on the matter. [16084/14]
View answerI am informed by the Central Bank that a meeting has taken place between Professor Morgan Kelly and representatives of the Central Bank, but I am not privy to the details of any such meetings conducted by the Central Bank.
As the Deputy is aware, the remarks by the UCD academic Morgan Kelly relate to the forthcoming stress testing by the ECB and in this context the Governor of the Central Bank indicated recently that the purpose of the forthcoming ECB stress tests on 128 European banks, which includes Irish banks, was to remove market and government doubts about the ability of banks to absorb losses with their own shareholders funds. It is important to highlight that the ECB Comprehensive Assessment will not get into loan restructuring. The objective of the review is focused solely on determining whether the banks have enough provisions against their loans and capital. Irish banks have just undergone such an exercise, their second in less than three years, which led to a substantial increase in their loan loss provisions at year end. As I have stated previously, I do not anticipate any capital issues for the Irish banks arising from the Comprehensive Assessment.
