Professor Patrick Honohan:

As regards the stress test, I will not be drawn into an assessment of what that will be. We are doing a serious exercise and have more information now and more analysis of what type of borrowers are in distress. Some things have not gone as well since the last stress test, while other things have gone a bit better. I will not be drawn into that, however.

There has been a lot of discussion over the capitalisation of banks. It is clear that the American banks have come out of this crisis faster than many people expected. There is a lot of talk about $700 billion being poured into the banking system but most of it poured out again. In most cases, the US government and its agencies cleared out of it.

In the European banks, there have been a number of stress tests using different models and approaches. None of them was as in depth as ours because we obviously had the biggest problem to deal with.

As far as some of those specific points are concerned, including the measurement of risk-weighted capital, the Central Bank does not use very much of the banks' own models for risk weighting on the assets. We have overrides in there and we do not think those models have really been tested over a long enough, stable period. Therefore, we are not vulnerable to that particular critique. We like to see what we have. We only have a small number of banks and we can see right into their balance sheets more easily than happens with large, complex institutions.