Irish banks to face stringent health checks ahead of bailout exit
Published 20/09/2013 | 22:54
The Irish authorities, the EU and the IMF have completed two days of Dublin meetings aimed at agreeing a blueprint that will make the country's upcoming bank health checks as close as possible to a planned EU-wide version in 2014.
Officials at the EU and IMF both confirmed that their representatives had been in Dublin this week for talks on the design of the tests.
A spokesman for the European Central Bank, the third element of the so-called troika, declined to comment.
The design of the tests will be crucial for Ireland as the country seeks to exit its 2010 bailout in December, a prospect that could be jeopardised if its banks were found to need significant further support.
A source with knowledge of Wednesday and Thursday's talks said efforts were focused on ensuring that the Irish tests will be as close as possible to the European version, so the exercise would not have to be repeated in 2014.
This suggests the tests, which will cover state-owned Allied Irish Bank and Permanent TSB and Bank of Ireland , will be robust, since the European round will be the most stringent tests the EU's banks have ever faced.
The Central Bank of Ireland declined to comment on the talks, while neither the EU or IMF would comment on the outcome of the talks.
The issue of banking stress tests has been a contentious one between Ireland and its international lenders, with Irish officials initially pushing for no tests ahead of the 2014 Europe-wide round.
The lenders did not think that Ireland, whose sovereign €67 billion bailout was triggered by a banking collapse, could exit its rescue programme without a thorough review of its banks.
A compromise was agreed in May which allows for an assessment of Irish banks' balance sheets to be carried out by the end of October, without any stress testing of how the banks would respond to future shocks.
EU-wide stress tests will be carried out in 2014, with the European Central Bank taking a lead role for eurozone countries, which will fall under ECB supervision from October 2014.