‘Urgent’ need for bank stress tests

Stress tests of the Irish banking system should happen as soon as possible and if the banks then need capital it has to come from an EU fund, former government adviser Alan Ahearne has said.

Politicians could be tempted to delay the stress tests for as long as possible to avoid making a decision on how to recapitalise the banks, but for the credibility of the economy and to ensure there is a full and sustainable return to the market, these tests have to happen quickly, he said.

Mr Ahearne was speaking before the Oireachtas European Affairs Committee on evolving economic and monetary union and the implications for Ireland. He was joined by fellow NUIG economics lecturer, John McHale.