FRANKFURT (MNI) – The Central bank of Ireland on Wednesday released
macroeconomic scenarios used for its banking stress tests, the the
results of which will be released on March 31.
The bank said that the stress test will cover a three-year time
horizon ending 2013 and will be applied to Allied Irish Bank (AIB), Bank
of Ireland (BOI), the Educational Building Society (EBS), and Irish Life
and Permanent (ILP).
The tests will include a “comprehensive, independent loan loss
estimation exercise…including in depth data validation and asset
quality reviews of each loan book,” the central bank said in a
statement.
It will also include a “prudential liquidity assessment review
(PLAR) that incorporates the establishment of liquidity targets for each
institution.”
“These elements will influence the eventual capital requirements of
the participating banks,” the bank said.
The baseline scenarios assumed by the test are based on an EU
Commission forecast for Ireland from December 2010 with additional
property price assumptions provided by the Central Bank. The adverse
scenarios are intended to test for a potential case in which conditions
deteriorate beyond what is assumed in the baseline scenarios.
Baseline Adverse
2011 2012 2013 2011 2012 2013
GDP 0.9% 1.9% 2.5% -1.6% 0.3% 1.4%
Government -5.7% -1.8% -2.4% -5.5% -4.3% -2.4%
Consumption
Balance of 1.2% 2.2% 2.6% 1.6% 3.1% 4.3%
Payments (%GDP)
Consumption -1.9% -1.0% 0.5% -3.9% -1.3% 0.1%
Unemployment 13.4% 12.7% 11.5% 14.9% 15.8% 15.6%
Rate
HICP 0.4% 0.6% 1.6% 0.1% 0.6% 1.0%
House Prices -13.4% -14.4% 0.5% -17.4% -18.8% 0.5%
Commercial -2.5% 1.5% 1.5% -22.0% 1.5% 1.5%
Property
[TOPICS: M$$EC$,M$X$$$,MT$$$$,MGX$$$,M$$CR$]
