ECB funding of Irish banks rises to €107.2bn
THE RELIANCE of Irish banks on European Central Bank funding rose again in December, following the Frankfurt-based bank’s allotment of an unlimited number of three-year loans for the first time last month.
Domestic and overseas lenders with operations in Ireland had €76.3 billion of long-term ECB loans at the end of December, up from €71.1 billion a month earlier, new Central Bank figures show.
The main refinancing operations for Ireland fell to €30.5 billion from €31.8 billion. Total ECB funding increased to €107.2 billion from €102.9 billion a month earlier, it said.
Irish banks have been forced to turn to the ECB for funding since the crisis struck the Republic’s financial system in late 2008.
In December, more than 500 banks across Europe borrowed €489 billion from the ECB.
“Irish banks have availed of this cheap long-term funding line,” Colm Ryan, co-head of fixed income at Dublin-based Goodbody Stockbrokers, said. “It gives them certainty over their funding structure and costs as they continue to deleverage.”
ECB president Mario Draghi yesterday said last month’s massive injection of cash into the financial system was beginning to lubricate seized credit markets. Additional reporting: Bloomberg