Irish bank tests send few signals to anxious EU rivals

Mon Dec 9, 2013 12:13pm EST
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By Laura Noonan

LONDON (Reuters) - Banks in Europe, keen for any hints about next year's industry health check by European regulators, will find few pointers from Ireland's just-completed review of its three major lenders.

The Irish test results - released by banks on December 2 as a pre-cursor to the country's December 15 exit from its sovereign bailout - could have provided a flavor of the tests the European Central Bank (ECB) is lining up for the euro zone's 128 largest banks over the next year. forerunner

Dublin had hoped its own "balance sheet assessment" of Ireland's main banks would count as part of Europe's banking industry check-up. But the Irish banks are not off the hook as the ECB has said they will be put through their paces in the same way as other banks in 2014.

"The Irish Central Bank's Balance Sheet Assessment was conducted completely independently from the ECB's planned comprehensive assessment," a spokeswoman for the ECB said.

The ECB aims to check if Europe's banks have set aside enough for bad loans. Banks will also be tested to see if they have enough capital to withstand future shocks and prevent a repeat of the bank failures that followed the financial crisis.

After the Central Bank of Ireland's review, the three banks - Bank of Ireland (BKIR.I: Quote), AIB (ALBK.I: Quote) and permanent tsb IPM.I - said they did not have to raise additional capital as a result.


But Bank of Ireland was the only one to publish a detailed statement, a point noted by several London-based analysts and experts. Irish finance minister Michael Noonan said on December 6 AIB and permanent TSB would publish more details shortly.   Continued...

People walk past a discount store in the Moore Street area of Dublin November 7, 2013. REUTERS/Cathal McNaughton