FRANKFURT (MNI) – Following is a verbatim text of a joint statement
by the European Commission (EC), the European Central Bank (ECB) and the
International Monetary Fund (IMF) welcoming today’s announcement by
Ireland of a restructuring and recapitalization plan for its banking
sector:

“Todays comprehensive announcements by the Irish authorities are a
major step toward restoring the Irish banking system to health which is
crucial for sustained revival of growth and employment.

Consistent with the program supported by the EU and IMF, the
Central Bank of Ireland, together with leading international consulting
firms, has identified the banks capital needs, based on thorough and
transparent valuations of bank assets and stringent stress tests
conducted with an appropriately high minimum capital ratio, which will
ensure a sound capital basis of the banks. The process was conducted in
close consultation with the staff of the EC, ECB and IMF, who have
reviewed the methodology utilized.

The EC, ECB and IMF staff welcome the rigorous capital needs
assessment and strongly support the authorities plans to ensure that
these capital needs are met in a timely manner. The capital needs can be
funded comfortably under the program supported by the EU and IMF.

The related plans to deleverage bank balance sheets, including
through phased sales of non-core assets over time, will reinforce the
benefits of higher capital and help banks regain access to the market
sources of financing needed to enable renewed lending.

The Irish government also made important announcements on the
future structure of the banking system, and the staff of the EC, ECB and
IMF endorse this strategy to focus on the development of two strong
pillar banks with sound business models able to serve the Irish
economys needs. The detailed restructuring plans for the banks are to
be notified to the EC for approval under state aid rules; the EC will
assess the plans based on established criteria, taking into account
market structures and the need to keep markets open.

The staff of the EC, ECB and IMF look forward to discussing
progress with implementing the measures announced today, together with a
broader range of economic issues, during the program review mission
starting next week.”

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