Professor Patrick Honohan:

The stress test parameters and the details were announced yesterday. The Central Bank was involved in the process and tracked the particular scenario being developed for Europe. We were attentive to ensure the way this was modelled in the Irish economy in terms of its implications for unemployment levels, house prices, commercial property prices and interest rates would be a realistic representation of the economy in order that we would not get caught out in an unrealistic scenario that might end up in a costly solution for the Government in the context of the banks. We worked hard on getting this right.

I will not give any guidance on what I think will happen or whether the banks will pass the tests. I will not answer the question for two reasons. First, I do not want to be found to be wrong, although I have a better idea of what the outcome will be than before the parameters were set. A second and more important reason is that this is happening in 28 countries in Europe. Every central banker is being asked about this and they are all saying they will have to see. The matter is complicated.