Ireland: Financial Sector Assessment Program: Technical Note-Stress Testing the Banking System
IMF Staff Country Reports, September 29, 2016
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Bibliographic details
- Published: September 29, 2016
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781475542226.002
Summary
- The Technical Note discusses the results of stress testing carried out to examine the banking system in Ireland.
- Tests examined the resilience of the Irish banking system to solvency, liquidity, and contagion risks.
- Results revealed several sources of vulnerability, although these remain manageable at the macro level.
Major Findings — Solvency, Liquidity, and Contagion
- Solvency risks: Stress testing assessed banks' capacity to withstand adverse credit and market shocks (summarized as solvency risks).
- Liquidity risks: Global liquidity stress tests reveal that some banks in the system would be exposed to liquidity risks in the event of large deposit withdrawals, under a more severe scenario than the Basel III Liquidity Coverage Ratio metrics.
- Contagion risks: Tests included contagion channels to evaluate system-wide amplification of bank-specific shocks.
- Overall assessment: Vulnerabilities identified by the tests remain manageable at the macro level.
Policy Implications and Considerations
- Strengthen liquidity buffers for banks that are exposed under severe outflow scenarios beyond Basel III LCR metrics.
- Ensure availability and access to counterbalancing capacity to cover net outflows across all maturity buckets.
- Monitor contagion channels and interconnections that could amplify solvency or liquidity shocks system-wide.
- Continue macroprudential surveillance given identified vulnerabilities that are manageable but present.
Key Statistics and Publication Details
- Pages: 71
- Volume: 2016
- Issue: 315
- Series: Country Report No. 2016/315
- DOI: https://doi.org/10.5089/9781475542226.002
- Stock No: 1IRLEA2016009
- ISBN: 9781475542226
- ISSN: 1934-7685
- Publication date on landing page: September 29, 2016
International Monetary Fund. Monetary and Capital Markets Department "Ireland: Financial Sector Assessment Program: Technical Note-Stress Testing the Banking System", IMF Staff Country Reports 2016, 315 (2016).
Content in this bundle
- Executive Summary