Honohan says Europe must press ahead with banking union

Wednesday 01 May 2013 19.27
Central Bank Governor Patrick Honohan before European Affairs Committee today
Central Bank Governor Patrick Honohan before European Affairs Committee today

European leaders must not allow an easing of tensions on financial markets to reduce the urgency of building a banking union, Central Bank Governor Patrick Honohan has said.

"Financial markets are counting on the completion of banking union," Professor Honohan told the Oireachtas Committee on European Affairs.

"We must avoid that any easing of tensions in the markets leads to a slackening in the pace of reform," he said.

Mr Honohan also said that he wants to see the Irish banks in a position where they can attract private investors, which in turn would meet their capital requirements.

Regarding Cyprus, the Central Bank boss said that no-one was very pleased with how the Cyprus situation was sorted out, saying the situation ''on the whole was not the best day's work''.

But he added that he did not think it would make a big difference to Ireland.

Governor Honohan told the Committee that he expects Ireland to exit the bailout programme on schedule.

He said that the selling by the National Treasury Management Agency of Irish bonds was a very positive position for the country.

Mr Honohan also told the committee that there should be a much higher capital buffer for banks.