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Dan White: Tell us the full truth, even if it's painful

As the American baseball player Yogi Berra once said: "It feels like deja vu all over again." The results of the second set of stress tests conducted on the Irish banks in the space of just nine months are being published today.

The latest stress tests, which have been conducted on behalf of the new European Banking Authority, had better make a better fist of it than the last stress tests published last July.

The July 2010 stress tests, which gave both AIB and Bank of Ireland a clean bill of health, quickly became a laughing stock when the rapidly worsening problems of the Irish banks forced this country to apply for an EU/IMF bailout just four months later.

We can't afford a repeat of last July's exercise, which was driven by a determination to present the European banking system in the best possible light.

With the latest set of results likely to be far more closely scrutinised than those of last July's stress tests, it is vital the EBA, which took over the supervision of eurozone banking regulation at the beginning of January, gets it right this time. Not alone will the money markets be watching the announcements closely, so too will the Irish public.

As this week's dreadful retail sales figures demonstrated yet again, Irish consumers are absolutely terrified.

Even those who are still working and have some money are so worried about the future than they aren't spending.

That is why it's so important the stress -test results tell us the full story, no matter how awful, about the likely losses of the Irish banks. Ever since the Irish banking crisis first erupted public opinion has been streets ahead of official opinion, both at national and European level.

The public realises that things are much worse for the banks than either the banks themselves or the Government have been prepared to admit.

The Irish people can see the physical evidence of the financial crisis, the ghost estates, the vacant shops, the closed factories, all around them with their own eyes.

They don't need a set of stress-test results to tell them what they already know: that the banks are banjaxed.

Lurking

What they do need is reassurance that we finally have an accurate figure for the banks' total losses and how much of those losses will fall on the taxpayer.

It is only when the Irish people are certain that there are no more nasty surprises lurking within the banking system that confidence, without which there can be no economic recovery, can begin to return.

So will today's stress-test results come clean on the full extent of the banks' losses or will we, as happened last July, get another unsatisfactory fudge?

While the results are unlikely to attempt to fly in the face of reality to the same extent as last year's results did, the EBA will be under huge pressure from the both the EU and the ECB to put the best possible gloss on things.

This is because with the State essentially bankrupt, a very high figure for Irish bank losses would make the issue of burden-sharing, with the EU and the ECB picking up some of the tab, unavoidable.

That's a debate both the EU and the ECB are desperate to avoid at virtually any cost.

If that happens and the EBA succumbs to pressure to minimise likely Irish bank losses no one, least of all Irish consumers, will be fooled.

Only the full truth, no matter how dreadful, offers us a way out of our current mess.