Banks may need €18bn of contingency fund

NEARLY €18 billion of the €25bn contingency fund for the banks — which formed part of last year’s EU/IMF bail-out deal — might be needed in order to recapitalise the Irish banks further in the aftermath of next week’s capital and liquidity stress tests.

The Central Bank is due to publish results from its latest PCAR and PLAR (Prudential Capital/Liquidity Assessment Reviews) stress tests on the Irish banks at the end of next week.

In a detailed report into the banks, and their potential capital needs, Davy Stockbrokers yesterday forecast that anything between €12.9bn and €17.7bn of the contingency fund will be needed for the banks after the completion of the stress tests.