McGrath calls for full publication of balance sheet assessment of Irish banks

Fianna Fáil Spokesperson on Finance Michael McGrath has called for the full publication of the Central Bank’s balance sheet assessment of the Irish banks.

Deputy McGrath commented, “The findings were given to the troika on November 29th but the level of information published to date has been totally inadequate. The Central Bank has yet not provided a detailed report on their findings in respect of AIB, Permanent TSB and Bank of Ireland. This is very concerning, particularly in light of the State’s support for the bank to date and the fact that the State effectively owns 100% of AIB and Permanent TSB.

“Bank of Ireland must be commended for providing the greatest level of detail. However the information it has put in the public domain raises a number of questions. It would appear the Central Bank’s assessment of the underlying capital position of Bank of Ireland is at variance with the bank’s own assessment. In fact, the Bank of Ireland goes out of its way to say it ‘remains confident in its own methodologies, calculations and impairment provisions’. What is unclear at this stage is if the Central Bank is considering requiring Bank of Ireland to raise more capital.

“The position in relation to Permanent TSB also requires urgent clarification. Its statement that the ‘capital position of Permanent TSB is above minimum regulatory requirements’ does not answer the questions about whether or not it is adequately capitalised. Similarly much more detail in required than AIB’s claim that the balance sheet assessment shows them to be ‘well capitalised’.

“The health of the banks is critical to the success of the overall economy. Under-capitalised banks are a threat to economic recovery as they risk starving businesses of much needed credit. We have already seen two banks exit the market in recent times. It is vital that the banks operating in the market are well capitalised and that this is clearly shown to be the case. The Central Bank can assist in this by immediately publishing their detailed assessment of the banks’ asset quality.”