Finance Minister Michael Noonan has said that he has not yet decided whether to seek a post bailout precautionary credit line.  

Minister Noonan was addressing the Joint Oireachtas Finance Committee today ahead of an ECOFIN meeting on Friday.

Mr Noonan told the committee that he sees advantages to both sides of the argument for a credit line, adding that he sees no downside either way.

He said the final decision will be taken on the basis of what is best for the country.

Mr Noonan said there is a window of relative calm at the moment in financial markets and in relation to Ireland's performance in the bailout programme - this is reflected in very low borrowing costs. 

If Ireland had a precautionary programme, the country would face the same issues about exiting from that programme in a year's time, the Minister said, adding that he could not predict what the financial markets would look like in a year's time.

In relation to the banking stress tests, the Minister said the asset quality review that was being conducted now on the Irish banks would feed into the pan European exercise being carried out by the ECB.  

As a result, the Irish banks will be subject to the same stress tests at the same time as the rest of the banks in the Euro area on the ECB's list of 128 institutions.

He pointed out that the last time Irish banks were stress tested it was on the basis of a core Tier One capital level of 10.5%, and that Irish banks were capitalised to meet that level.

More recent stress tests on Spanish and Cypriot banks used a core Tier One ratio of 9%, while the forthcoming ECB led tests will use a capital ratio of 8%. 

However, he said there was no final conclusion on what type of capital instruments could be included in that 8% figure, so it was too early to say if the lower Tier One target figure would be to the advantage of Irish banks. 

He also told the Committee that he has received advice from the Central Bank that there will not be a need for further capital to be injected into the Irish banks. He said that the Irish banks are strong now.

He said if there is a need for capital then it will come from private funds or private retention.

Mr Noonan also told the Committee that the takeover of Newbridge Credit Union by Permanent TSB was the final option available.     

He said that he would have preferred to see the situation resolved through the wider credit union movement.

The Minister said it was the Government's objective to maintain a strong credit union presence in Newbridge - whether that was through a sub-office of another credit union, or whether a group of interested parties came forward to establish a new credit union presence there.

The proposed European Single Resolution Mechanism that will be discussed at this week's ECOFIN meeting will not apply to Irish credit unions, he added.