Submitted by: Submitted by Claytonbarrozo
Views: 100
Words: 432
Pages: 2
Category: Business and Industry
Date Submitted: 10/21/2013 04:15 PM
Prudential Capital Assessment Review (“PCAR”) 1. 2. 3. 4. 5. 6. 7. 8. 9. The Central Bank has set a new minimum capital requirement for Allied Irish Bank, Bank of Ireland, ILP and EBS of 10.5% Core Tier 1. In addition, the Central Bank is requiring these banks to raise sufficient capital to achieve a capital ratio of at least 12% core tier 1 by 28 February, 2011 in the case of AIB, BOI and EBS and by 31 May 2011 in the case of ILP. The Central Bank will require this additional capital to be in the form of equity (or equivalent instruments for EBS). The total capital injection will be €8bn. This figure takes account of the capital impact of further NAMA transfers (see below). This action, along with early measures to support deleveraging, will result in an injection of €10bn of fresh capital into the banking system, above and beyond that already committed. Bank of Ireland, Allied Irish Banks, ILP and EBS will be subject, as previously announced, to a stress test in March 2011 under the Central Bank’s PCAR methodology. If, as a result of the PCAR, banks are assessed to be at risk of falling below the 10.5% core tier 1 target then further capital injections will occur. The PCAR will be enhanced by the inclusion of a detailed review, to be conducted by an independent third party, of asset quality in the participating banks. In addition, an independent third party will review the quality of the data banks submit for the PCAR. The Central Bank will conduct a review of the adequacy of provisions in Irish domestic banks. Where required, banks will be required to increase provisions to take account of asset performance. Prudential Liquidity Assessment Review (“PLAR”) The Central Bank will perform a PLAR for Bank of Ireland, Allied Irish Banks, ILP and EBS in Q1 2011. The PLAR will set bank specific funding targets consistent with Basel III and other international measures of stable, high quality funding. To meet PLAR targets, and also to maximise the efficient...