Brussels, 28/03/2011 (Agence Europe) - The bank stress test results will be revealed on Thursday 31 March and will show that the capital requirements of four Irish banks (Bank of Ireland, Allied Irish Banks, Irish Life Permanent and the Educational Building Society) will be from €18 billion to €23 billion, according to reports in the Irish media on Monday 28 March. The international financial aid granted to Ireland includes €10bn capital for Irish banks, but there is also a reserve of €25bn (see EUROPE 10266). The European Commission will be pleased that these figures confirm its view that enough financial aid has already been granted.
The European Central Bank is reported to be putting the finishing touches to a new lending facility to provide cash to European banks, including Irish banks. Irish banks find it hard to raise cash on the money markets and are highly dependent on loans from the Irish central bank (€70bn to date) and the European Central Bank (€110bn to date). To be eligible for the new ECB loans to shore up their liquidity, the Irish banks will have to sell off assets to the tune of € 90bn in total. The Irish government fears that against the current backdrop, forced sales will mean the banks will have to be bailed out by the state to cover their increased capital requirements, which will only worsen Ireland's financial plight. This issue is closely connected with the country's renegotiation of the lending criteria for the international loans received by Ireland at the end of last year (see EUROPE 10345). (M.B./transl.fl)