Business Irish

Friday 19 September 2014

Banks will be subject to regular stress tests under new rules

Published 23/06/2014 | 11:06

  • Share
Finance Minister Michael Noonan with ECB chief Mario Draghi (right)
Finance Minister Michael Noonan
Finance Minister Michael Noonan

BANKS will be subjected to regular stress test exercises under new supervisory arrangements in Europe, a senior official from the European Central Bank said in Dublin this morning.

  • Share
  • Go To

The ECB will probe the financial health of some 130 banks across Europe - including five in Ireland - in the autumn as the ECB prepares to take over as the single supervisor across Europe.

Daniele Nouy, chair of the supervisory board of the ECB, told a conference in Dublin that there would be frequent exercises beyond this year, but not of the same scale.

''There will be regular asset quality review, stress testing exercises, but not of the magnitude of the current one,'' she told the Irish Banking Federation's Banking Union Conference in the Westin Hotel

In Ireland, AIB, Bank of Ireland, Ulster Bank and Permanent TSB will be stress-tested in the autumn as well as the Irish-based operations of Merill Lynch.

Finance Minister Michael Noonan has repeatedly said that there is no evidence that the banks will need further capital.

Domestic Irish banks went through so-called asset quality reviews (AQR) late last year as a prelude to the main tests to be carried out in the autumn.

The stress test process is aimed at uncovering any hidden risks or losses in the banks by the end of October, before the ECB takes responsibility for overseeing them in November.

Read More

Editors Choice

Also in Business