Some major Irish banks have been given cause for optimism, after passing the new European banking stress tests.
AIB and Bank of Ireland are both understood to have passed the tests, which are aimed at testing banks’ capabilities at weathering a fall in the value of sovereign bonds and various economic shocks.
The tests have been devised by the Committee of European Bank Supervisors (CEBS), and have so far examined 91 banks, largely from the troubled PIIGS countries – Portugal, Ireland, Italy, Greece and Spain.
Some financial insiders are questioning the true value of the test and are a urging caution over what the passing means for the Irish institutions.
Sebastian Orsi, of Dublin stock-broking firm Merrion, said, "What people will be looking at is whether the scenarios they've been testing against are realistic."
"From what's been leaked, not all of the assumptions would seem to be."
When the tests on AIB and BoI began, there were significant concerns that both institutions could be at risk of failing, but their quiet confidence was boosted by the pursuant extensive testing of their books by the Financial Regulator.
BoI is understood to have passed on the back of last month's €2.9bn fundraiser, which generated sufficient capital to satisfy European policy makers.
AIB passed after creating a defined outline to improve its capital position by €7.4bn before the end of the year, through selling off non-core assets and a fund-raising spree.
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