Recapitalisation ‘will not be shock to system’

The Irish banks may need to be recapitalised following the stress tests later this year, but not at a level that would be a "shock to the system," said the secretary-general of the Department of Finance, John Moran.

“I am very confident we will get through them [the stress tests],” Mr Moran told the Dáil Public Accounts Committee. “And if there is capital needed, it will not pose a risk to the system.”

The three domestic banks — Bank of Ireland, AIB and Permanent TSB — are subject to the ECB’s comprehensive assessment of the banking system over the course of this year. If any of the banks fail the stress tests they will be forced to raise capital.