Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

It will accept it, but it will repeat it. The issue for it is that it wants to be sure of what it is taking over in terms of institutions it will regulate. So it will carry out full asset quality reviews of all the banks across the banking union, including Ireland. From our point of view there is an advantage in it because the date of the last quality review was June 2013. The asset quality review the ECB will carry out will be aligned with the rest of Europe, which is the last day of December 2013. It is an asset quality review six months later and the Deputy will recall that property prices particularly in Dublin have increased quite substantially in that part of the year.

The Deputy knows how the stress test works. There is a normal line and a stress line, and assumptions are made about the stress. One of the assumptions made previously was to consider what would happen if property prices reduced by, maybe, 20%. That is how it is measured under stress and the risks are built in. It would be unreasonable to make an assumption now that property prices would reduce by significant amounts; if anything they are going in the opposite direction.

As the value of the collateral that underpins the loan book is increasing, we should get a better result. However, it is not possible to predict the result with accuracy because if it was we would not need a stress test at all. It is a test to find out what the situation is, so we have to wait to get it. All the advice we are getting is that we will not need additional core tier-one capital.