Republic's stress tests fail to ease capital fear
The Republic's Financial Regulator Matthew Elderfield has admitted his stress tests had failed to convince financial markets that Ireland's banks have enough capital to withstand their future losses.
Speaking in Dublin yesterday, Mr Elderfield said that a "contingent capital facility" that would act as a backstop for bank funding was under "active consideration".
The Irish Central Bank is also exploring the benefits of "immediate additional capital injections" that would help banks meet new international funding standards ahead of their peers, he added.
The comments mark the first admission from the Regulator that Irish banks could need more capital than recommended by the stress tests, which foisted capital raising targets on the banks earlier in the year in a bid to foster confidence.
Mr Elderfield yesterday emphasised that his office had "not yet seen hard evidence" that would make them revise their views on loan losses, which formed the basis of the stress tests.
He admitted, however, that the measures taken so far had "not been sufficient to restore market confidence", prompting the Irish Central Bank to consider "additional policy measures".