The challenge is to address Irish banks' exposures to land and development loans, said John Hurley, the governor of the Central Bank and Financial Services Authority of Ireland, in its latest Annual Report.

Hurley said that, specifically, the uncertainty over the eventual impact of loan losses from these exposures on the banks' capital positions was the main challenge. He said that cleaning banks' balance sheets of non-performing assets was an essential step in recovering from the crisis.

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