ECB tells Central Bank to speed up sale of ‘Anglo’ bonds

Central Bank moves to dispose of sovereign bonds held after collapse of Anglo Irish Bank

The European Central Bank has urged the Central Bank of Ireland to accelerate the sale of sovereign bonds it holds after Anglo Irish Bank’s collapse.

The ECB welcomed moves by Dame Street to dispose of the bonds held after the Government’s move in 2013 to liquidate Irish Bank Resolution Corporation, Anglo’s successor, and scrap promissory notes issued to fund its public rescue.

In its 2014 annual report, however, the ECB said the Irish authorities should speed up the process.

“The reduction of IBRC-related assets by the Central Bank of Ireland during 2014 is a step in the direction of the necessary full disposal of these assets,” the ECB said. “However, a more ambitious sales schedule, in particular for the long- duration floating rate notes, would further mitigate the persisting serious monetary financing concerns.”

Intensified sale

The Irish Central Bank is known to have intensified the sale of €25 billion in long-term bonds last year but the actual rate of disposal will not be set out until its own annual report is published in May.

There was no comment from Dame Street on the ECB’s comments, which essentially mirror comments made in the ECB’s 2013 annual report.

In a European Parliament hearing  on the 2014 report, ECB vice-president Vitor Constancio said the institution could not undertake to fund Greece and its banks regardless of the situation in the country.

He insisted the bank was convinced, however, that Greece will remain within the euro zone.

“We are convinced at the ECB that there will be no Greek exit,” Mr Constancio told MEPs. “The EU treaty does not foresee that a country can be formally, legally expelled from the euro. We think it should not happen.”

Amid growing anxiety that Greece could soon default, he said the country’s banks were solvent but could not depend on unlimited ECB support.

“We have been forthcoming but I cannot promise . . . that we will fund Greece whatever the situation and the amount and the conditions.”

Renewed uncertainty about the fate of Greece has triggered further large increases in its borrowing costs on the open market. While rating agency Standard & Poor’s said on Monday night that risks of an exit were “apparently escalating”, such an outcome was not in its view likely.