Second bailout ‘a downside risk’
A report into the Irish banking sector by Deutsche Bank suggests the above scenarios as being downside risks. However, analysts David Lock and Jason Napier said if the capital requirement were to materialise in the next series of stress tests for the banks, due in 2013, “it could compromise the sovereign’s ability to re-open private funding markets”.
“The volume of additional recapitalisation may be modest and may well have been covered by pre-funding if the sovereign has already returned to the market in the summer of 2012,” the report stated.
