Financial Regulatory Forum

New capital targets to cushion all loan losses-Irish regulator

April 21, 2010

    DUBLIN, April 21 (Reuters) – Ireland’s financial regulator said the strict new capital levels Irish banks must meet will cushion losses on smaller loans and not just the riskier batches being moved to the country’s “bad bank.”
   Last month Matthew Elderfield said that Ireland’s troubled banks would have to attain a level of 8.0 percent of core Tier One capital by the end of the year, necessitating Dublin to pump at least another 22 billion euros into the sector. [ID:nLDE62T0L9]
   Elderfield said on Wednesday that the regulator had projected loan loss forecasts for the next three years and included ad-ons in case loan impairments came in higher than forecast in order to make sure the banks commanded market confidence.
   “This provides an additional source of comfort to us as prudential regulators and should similarly provide additional comfort to investors measuring up opportunities in the banking sector,” Elderfield told a conference in Dublin.
   He added that the requirements would leave Irish banks with little distance to travel when wider proposed reforms of capital and liquidity requirements — dubbed Basel III — are introduced.
   (Reporting by Padraic Halpin) ((padraic.halpin@reuters.com; Reuters Messaging: padraic.halpin.reuters.com@reuters.net; +353 1 500 1504)) Keywords: IRELAND REGULATOR/
  
Wednesday, 21 April 2010 08:30:02RTRS [nN20622265] {C}ENDS

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