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Irish regulator says banks to need new funds-paper
May 30, 2012 / 10:28 AM / 6 years ago

Irish regulator says banks to need new funds-paper

BERLIN, May 30 (Reuters) - Ireland’s banks will likely need a further three to four billion euros over the coming years to meet international capital requirements, the country’s financial regulator told German paper Boersen-Zeitung on Wednesday.

Dublin had to pump 64 billion euros worth of capital into its banks after the bursting of a property bubble almost collapsed the sector and Ireland’s central bank governor said last week that its lenders remained adequately capitalised.

Regulator Matthew Elderfield said in March that the looming Basel III rules would likely force banks to require more capital, although the government hopes the majority state-owned sector will be in a position to raise the funds itself by then.

Asked on Wednesday if Irish banks need more capital, Elderfield, who is also a deputy governor at the central bank, said: “In the medium term they will certainly need more capital, if only because of the stricter international capital requirements.”

“With regards to measuring capital and the question of which instruments count and which do not, the institutes must go even further,” he said. “In the coming five to six years, the Irish banks should need a further three to four billion euros.”

He added that Ireland was making good progress with the stabilisation of its banks, but that “the banks also need more time to check their credit portfolio”.

“They are not as far as they should be, their operative ability is not as strong as it could be,” he said.

The banks are now struggling to return to profitability ahead of the so-called Basel III rules which will gradually require them to hold greater capital buffers by 2019.

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