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Stress tests on Irish banks accentuated possible losses - central bank

Published 02/08/2016, 13:35
Updated 02/08/2016, 13:40
© Reuters.  Stress tests on Irish banks accentuated possible losses - central bank

DUBLIN (Reuters) - Stress tests by the International Monetary Fund and the European Banking Authority (EBA) have shown that Irish banks are adequately capitalised but remain vulnerable to a downturn. Ireland's central bank chief said on Tuesday.

But Philip Lane added that the EBA methodology accentuated potential losses by Irish banks, which have experienced higher loan rates since 2008.

"Since projected credit losses in the adverse scenario are calculated based on past experience, the capital depletion in the adverse scenario is inevitably more pronounced for Irish institutions," Lane said.

Ireland's two main lenders, Allied Irish Banks (I:ALBK) and Bank of Ireland (I:BKIR), fared second and fourth worst respectively among 51 banks scrutinised over their ability to withstand a three-year theoretical economic shock.

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