Stress tests ‘could be rolled out indefinitely’

The EU-wide stress tests scheduled for March 2014 could be rolled out indefinitely to avoid lumpy recapitalisations, according to the global head of market economics at BNP Paribas, Paul Mortimer-Lee.

Irish banks were originally supposed to undergo Central Bank-conducted stress tests before the country exits the IMF/EU bailout programme in November. But this asset quality review was scrapped and subsumed into the wider EU bank stress tests that were to be scheduled in March.

Mr Mortimer-Lee, speaking at a conference organised by the Federation of International Banks in Ireland, said: “They [European Banking Authority] are putting off this asset quality review for as long as possible because they don’t want to uncover the dead bodies. Those dead bodies are in Italy, by the way, not Ireland.”