Banks ‘likely to pass ECB stress tests’

The forthcoming ECB stress tests are unlikely to cause any major problems for Irish banks, according to NUIG economics lecturer and former government adviser Alan Ahearne.

The stress tests parameters, which were released last month, are similar in scope to the prudential assessment capital review conducted by the Central Bank in March 2011, said Mr Ahearne. At the time the banks were sufficiently well capitalised to withstand the worse case scenario outlined in that assessment.

“This would suggest that the banks are unlikely to need huge amounts of new capital on this occasion,” said Mr Ahearne at the RaboDirect investor seminar in Cork.