THE Irish authorities have given the country's bailout partners a firm commitment that the standard of our next round of banking stress tests won't be harmonised with the more lax standards used by the European Banking Authority, even though both tests will be run at the same time.
The Irish Independent understands that the commitment to uphold the tough standards of the Irish tests is laid out in the latest Memorandum of Understanding (MOU) signed between the Government and the European Commission, European Central Bank and International Monetary Fund.
Last week, the Government announced that the next stress tests will be in November -- eight months later than expected -- so they will be at the same time as the EBA's tests.
The Irish Independent understands that there was broad consensus within the troika that it would be "less confusing" to hold both sets of tests at the same time.
Given the €24bn recapitalisation our main banks went through last summer, the International Monetary Fund and the European authorities are not unduly worried that the banks could need more money urgently.
Sources stressed, however, that it would be "made very clear" in the next memorandum that the next Irish stress tests would have to be as rigorous as last year's ones and could not be eased back to European standards.
"The Irish stress tests are something that have gained a lot of credibility internationally," one source said. "It's important that we keep that; we will not be compromising."
Others said that some elements of the European tests might incorporate elements of the approach that Ireland has taken.
The European tests have been broadly discredited for failing to spot impending disaster, such as the collapse of Franco Belgian banking giant Dexia.
The latest European assessment, run at the end of last year, ordered Europe's banks to submit plans to raise €115bn by this week. ECB chief Mario Draghi has been critical of the approach, which many fear could result in value-destructive fire sales.