In preparation for the timely introduction of the Single SupervisoryMechanism (SSM) the Irish authorities, in consultation with staff of the EC, ECB and IMF, will conduct a stress test in accordance withthe new EU methodology, ahead of and in close proximity to theupcoming SSM exercise. In addition, the authorities will consultwith the staff of the EC, ECB, and IMF, and taking into account progress in developing the relevant SSM methodology, advance preparatory work on a number of fronts including the preparations of the loan loss forecasting models underpinning the forthcoming stresstest. The models will be subject to external validation.
Consult ex-ante with the European Commission, the ECB and theIMF on the adoption of policies that are not included in thisMemorandum but that could have a material impact on theachievement of programme objectives.4.
To facilitate programme monitoring, the authorities will provide the EuropeanCommission, the ECB and the IMF with:
All information required to monitor progress during programmeimplementation and to track the economic and financial situation.
A compliance report on the fulfilment of the conditionality prior tothe release of the instalments.
Reliable and regular availability of budgetary and other data asdetailed in Annex 1.
Actions for the eleventh review (actions to be completed by end Q2-2013)Financial sector reforms
The authorities will report by end of May 2013 on the evolution of regulatory capitalwithin the PCAR banks up to the end of December 2012, and will present and discusstheir findings with the staff of the European Commission, the IMF, and the ECB.
The authorities, in consultation with the staff of the European Commission, the IMF,and the ECB, will assess banks' deleveraging based on the existing nominal targets for disposal and run-off of non-core assets in line with the 2011 Financial MeasuresProgramme. Fire sales of assets will be avoided, as will any excessive deleveraging of core portfolios, so as not to impair the flow of credit to the domestic economy.
Funding and liquidity monitoring
The authorities will provide staff of the European Commission, the IMF, and the ECBwith a detailed assessment of banks' progress towards the relevant Basel IIIrequirements using the advanced monitoring framework.