Dáil told tests based on ‘worst case scenario’

THE stress tests for Irish banking were based on a further collapse in property prices of nearly one-third, Michael Noonan warned the Dáil.

The Finance Minister said the predictions had veered heavily towards the worst case scenario in order to restore credibility to the Irish Government’s medium term forecasts after four previous “definitive” totals for the banking crisis proved hopelessly inadequate.

Mr Noonan said two new banking entities would be created to act as “twin pillars” for the Irish financial system and would be built around Bank of Ireland in one structure and AIB/EBS in the other.