Permanent TSB warns on capital if loan rates miss stress-test

Permanent TSB boss Jeremy Masding said Irish banks would need more capital if they become overly lax on mortgage debt forgiveness and variable-loan interest rates fall.

Permanent TSB has cut its Irish standard variable rate by 85 basis points since May.

Permanent TSB Group chief executive Jeremy Masding said Irish banks would need more capital should they become overly lax on mortgage debt forgiveness and variable-loan interest rates fall below those assumed in stress tests.

Exceptional or unusual rules in relation to debt forgiveness “would have a material impact on customer repayment behaviour and the calculations underlying the stress tests would have to be completely recalculated - leading to a huge increase in the ...