Irish banks will have to undergo regular stress tests as part of the new European Banking Union, one of the region’s top regulators told a conference in Dublin.

Under the EU banking union, troubled banks in small countries like Ireland will get the same treatment as those from bigger countries.

WHEN did Barack Obama cease to be homophobic? Is Enda Kenny redeemed from his homophobia? If some of the hoopla of recent days is to be taken seriously, then anybody who doesn’t favour same sex marriage can be described as homophobic.

European Stability Mechanism (ESM) funds should be used to recapitalise banks, including Irish banks, as part of an EU-wide Banking Union, IMF mission chief to Ireland, Ajai Chopra, told a conference in Dublin.

Investors and depositors with over €100,000 in savings will in future lose their money first when a eurozone bank fails, EU finance ministers have agreed, as part of a major step towards creating a banking union.

The EU still has to decide what would happen to uninsured depositors in the event a bank collapsed.

Ireland’s banks will besupervised directly from Frankfurt by the ECB from next March following agreement on how the first plank of a banking union would operate and paving the way towards EU direct bank recapitalisation.

Progress on establishing a European banking union is uneven and stalled in some areas, but it is necessary for the European Stability Mechanism (ESM) to recapitalise banks and overcome eurozone tensions, deputy governor of the Central Bank, Stefan Gerlach said yesterday.

The EU banking union, intended to save banks from bringing down states, is teetering on the edge as countries battle to save their domestic interests.