PRODUCT PROFILE

Latest Dublin Prices

Moody's: Irish banks need more capital

Thursday, January 24 17:04:19

Global credit ratings agency Moody's warned today that Irish, Spanish, Italian and British banks may need to bolster their capital reserves to cope with rising bad loans.

"While there has been strengthening in many banks' financial performance, there are a number of interconnected themes with material implications for bank credit that we will closely follow in 2013," said Moody's Global Banking Managing Director Greg Bauer.

"We believe that many banks, in particular in Spain, Italy, Ireland, and the UK, require material amounts of additional provisions to fully clean up their balance sheets," Moody's said in its global banking outlook for 2013.

"Some banks have in recent years delayed full recognition of embedded loan losses, partly by restructuring loans," the report added.

"This strategy of buying time limits a bank's capacity for new lending and poses risks for creditors of European banks,'' it said. The agency did not say how much extra money banks would need."

"Some banks have in recent years delayed full recognition of embedded loan losses, partly by restructuring loans," the report added.

"This strategy of buying time limits a bank's capacity for new lending and poses risks for creditors of European banks," it said.