Ireland's stress tests on Thursday will reveal an additional 20-25 billion euro hole in its banks capital and will be followed by a radical restructuring of the sector, the Irish Independent newspaper reported. The paper, which said only that it had spoken to government sources ahead of the publishing of the tests, said the EBS building society EBSBS.UL would be merged into the country's second largest lender AIB (ALBK.I). The insurance arm of Irish Life (IPM.I) will also be sold and the government will also create special vehicles to take 80 billion euros off the balance sheets of the four main banks, the newspaper said.
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