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Our banks pass EU's stress test

ALL three Irish banks have passed stress tests by the European Union, which aimed to assess the financial strength of institutions in the region.

But eight European banks failed, and a report from the European Banking Authority said they would need to raise €2.5bn in capital to withstand a prolonged recession.

The tests on 90 banks in 21 countries examined the ability of each institution to withstand economic and market shocks.

Bank of Ireland returned in 48th place in the European tests -- despite getting full credit for its latest €5.35bn bailout.

BOI's place in the bottom half of a league of 90 European institutions comes despite pledges that this summer's bailout would make Ireland's banks among the strongest in Europe.

But the Department of Finance insisted it was not concerned about BOI's results, since the bank passed "rigorous" Irish stress tests in March.

AIB, meanwhile, finished 17th while tiny Irish Life & Permanent grabbed second place in the tests.