The Republic, home to Europe's worst banking crisis, has decided to make a bid to become the location for the offices of one of the agencies set up to deal with the turmoil: the European Banking Authority.

Minister for Finance Michael Noonan said the Cabinet is to make a public declaration of interest in Ireland becoming the base of the agency, which will have to move from London as a result of Brexit.

A number of other EU states, including Germany, Poland, France and Sweden, are interested in hosting the EBA. However, the Government's pitch is that Ireland, "with its significant financial services sector and efficient transport links to other European capitals, is ideally suited for the authority's relocation".

Set up in 2011, the banking authority was tasked with finding risks and vulnerabilities in the EU banking sector at the height of the financial crisis, including the setting up of pan-European stress tests.

Taxpayers in the Republic were forced to commit a gross amount of €64 billion to the nation’s banks during the crisis, contributing to the State seeking an international bailout in 2010.

Capital levels

The most recent EBA test, carried out in co-operation with the

European Central Bank

in July, found that

AIB

and Bank of Ireland’s capital levels would be among the worst positioned among large banks across the euro area under a so-called adverse scenario.

The EBA decided not to use pass-fail terminology in the stress tests, which examined 51 banks across 15 countries. However, both Irish banks were comfortably above the hurdle of having a so-called fully loaded common equity tier 1 ratio of more than 5.5 per cent for both the 2015 year-end and under a “baseline scenario” for the end of 2018.