JUST A DAY after Ireland’s exit from the bailout programme, the European Central Bank’s (ECB) Mario Draghi said the Irish banking system is still a source of “some concern”.
Speaking in the European Parliament today, he said the Irish balance sheet assessment, which is carried out by the Central Bank of Ireland “falls short” of stringent stress testing that he feels is needed.
He added that the exercise was not “forward looking”. Speaking about Ireland he said the programme of implementation is “consistently on track” but said:
The Irish banking sector remains a source of some concern, with outstanding issues still requiring swift and decisive action.The recently submitted results for the Irish specific balance sheet assessment exercise indicated that while no capital shortfalls were identified there is a need for adjustments to provisioning as well as risk weighted assets.
He said this meant that banks will have to set aside capital to pay off any future loans which go bad adding that it should be sorted out before next year when the new Single Supervisory Mechanism’s stress tests are carried out.
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