THE GOVERNOR OF the Central Bank has said that that the upcoming stress tests for Ireland’s banks would be “granular, more explicitly transparent, and tougher” than those carried out in 2010.

Professor Patrick Honohan said that more strenuous tests would be imposed on Irish banks. “We are determined to present a stress test that will not only be more convincing to the market, but also be better insulated against surprises by using aggressive stress assumptions and modelling,” he said at the International Centre for Monetary and Banking Studies.

Honohan said that he saw no risk that the ECB would stop pumping large volumes of short-term funding to Irish banks, Reuters reports.

Honohan told the Geneva-based group that the process of downsizing financial institutions was underway, reports RTÉ. He said that the largest element of this restructuring had been the sale of property-related loans to Nama last year.

Honohan said that the the involvement of foreign owners – who would bring capital, risk control and other management skills to the sector – was the best way to stabilise the banking system: “Provided they bring credible business plans, I look forward to welcoming new owners of Ireland’s downsized and cleaned-up banks”, he said.