UPDATE 1-Ireland econmin: stress test to show capital need

* Ireland minister says stress tests to clean table

* New tests will show capital need

* Government to stick to fiscal obligations

(Adds quotes)

FRANKFURT, March 30 (Reuters) – Ireland’s banking stress
tests on Thursday must reveal the true extent of the sector’s
capital needs, the country’s economy minister was quoted as
saying on Wednesday.

Concerns that the 35 billion euros set aside in Ireland’s EU
and IMF bailout would not be enough to secure the banks’
immediate future drove Irish bonds and the euro lower last week.

Signals of a new European Central Bank plan to provide
liquidity have eased some of those concerns, however, and a
Reuters survey showed analysts expect the tests to show they
need an injection of around 25 billion euros. [ID:nLDE72O0UE]

Economy minister Richard Bruton said this round of stress
tests have to be so tough and fair that they remove any doubts
of the state of the country’s beleaguered banking sector.

“We need finally an honest assessment, one that is based on
best international practices,” he told German newspaper
Handelsblatt.

“Afterwards there can be no feeling that people are looking
at Irish banks through rose-tinted glasses … Our ambition is
to clean the table and we will do that.”

Bruton said it was hard to ease Irish banks’ dependence on
central bank liquidity as long as they were undercapitalised.

“It is very difficult to improve banks’ liquidity need, when
there is a feeling that banks do not have enough capital,”
Bruton told the daily.

He also said Ireland was committed to meeting all its fiscal
obligations under the EU/IMF rescue package. He also warned
against raising the corporate tax rate, saying it would have hit
investor confidence.
(Reporting by Sakari Suoninen and Marc Jones; editing by
Patrick Graham)

UPDATE 1-Ireland econmin: stress test to show capital need