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Financials

Irish banks have sufficient capital to absorb severe shock - central bank

DUBLIN, Nov 26 (Reuters) - Ireland’s retail banks have sufficient aggregate capital to absorb shocks materially worse than baseline projections that already forecast a no trade deal Brexit, a new assessment by the country’s central bank showed.

The banks combined transitional core equity tier 1 (CET1) capital ratio would fall to 12.6% under the baseline scenario and 8% in the adverse scenario from 18.5% currently, the central bank said.

The adverse scenario predicts a prolonged period of COVID-19 disruption through most of 2021 similar to the lockdown implemented earlier this year, a slower-than-expected recovery of the global economy and the potential for banks to amplify the downturn by tightening lending standards. (Reporting by Padraic Halpin; Editing by Alison Williams)

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