stability are different, they are complementary and combine to deliver a comprehensive approach to stability issues. there are various joint initiatives between the central bank and financial regulator, where our technical expertise is pooled. examples of this co - operation include our regular macroeconomic stress - testing exercises and publication of the financial stability report ; a regular programme of joint meetings of central bank and financial regulator management with the senior executives of our major banks ; and, finally, the parties cooperate fully in their participation in international fora on financial stability issues. there is also a memorandum of understanding between the central bank and financial regulator on financial stability issues. under this agreement, the central bank contributes to stability through the formulation of monetary policy, oversight of the financial system infrastructure, surveillance of the financial system, and undertaking any official financial operations that might be required in exceptional circumstances. for its part, the financial regulator makes its contribution through its prudential and consumer roles. in addition, a separate joint management committee was established to deal solely with the stability issues. the financial stability committee is the main forum where senior management from both the central bank and financial regulator meet formally to consider financial stability issues. however, in practice, staff at all levels of the organisation come together regularly in an informal way to discuss these matters and to undertake joint work. publication of the financial stability report is one of the ways in which our organisation contributes to financial stability on an on - going basis. a key element of the report is that it represents the joint views of both the regulator and the bank. it is our hope that the wideranging analyses in these reports encourages dialogue among the wider public on financial stability issues and conveys the importance of a stable financial system. in addition, the central bank and the financial regulator jointly hold round - table meetings with senior executives of the main domestic credit institutions as early as possible after publication. the aim of these meetings is to focus attention on the key risks outlined in the report. a key area where co - operation between the central bank and financial regulator has proved most useful is in respect to financial crisis management. the organisation is constantly developing its procedures to deal with potentially disruptive events and this is very much a joint effort between both parties. the central bank and financial regulator have held joint crisis simulation exercises and, more recently, these have involved the participation of officials from the irish treasury. this is in addition to the normal domestic standing group arrangements. this co - operation between both the central bank, financial regulator and treasury department leaves

goal of current banking policy as has been mentioned elsewhere. apart from the pressure on the sovereign, the capital position of the banks has, as is wellknown, been placed under pressure by actual and especially prospective loan losses. naturally, long - term lenders to banks need assurance as to the adequacy of the banks ’ capital position and this means not only that the banks ’ capital has had to be increased – and this has been done on a very large scale over the past two years – but that investors need more and better information about the portfolio of the banks. the lengthy process of determining the nama - related loan losses and the time taken in some cases to meet the central bank ’ s capital target set out in the prudential capital adequacy review pcar announcement of march 30, 2010, and revised at the end of september, has tended to muddy communication around the capital adequacy of the irish banks. there is market concern about tail risk in the banks [UNK] portfolios. this, together with the heightened market uncertainty prevailing since the end of april, certainly argues for higher percentage capital targets. and, while the external experts have found no fault with the methodology used for this year ’ s pcar stress test, the next exercise, which takes place early in 2011, will both dig deeper where possible, and take account of evolving economic and loan performance developments and prospects over the year. as already indicated in the past couple of days, it is clear that addressing both the capital ratios and the pcar exercise will be key elements of the programme being negotiated at present with the eu commission and the imf in liaison with the ecb. capital is an indispensable multi - purpose buffer against unexpected risks, though it is costly, especially for dealing with tail risks. there is another dimension along which tail risk can be lowered, thereby further increasing confidence of investors on a less costly basis. this falls into your area as accountants, because i am talking about accounting and other information disclosed to the market. i have already railed elsewhere against the backward - looking loan - loss provisioning practices encouraged by international financial reporting standards ( ifrs ) and still all too pervasive in the reporting by most of the irish banks. i find it unsatisfactory that expected losses in many parts of the portfolio are clearly higher than the provisions already taken, because i fear that this evident and in some cases explicit discrepancy may awaken doubts in the