IRISH LENDERS’ reliance on emergency liquidity assistance from the Central Bank reduced last month as banks accessed market funding and raised money through the disposal of assets.

Figures released yesterday by the Central Bank showed that €47.7 billion in “other assets”, consisting mainly of emergency liquidity assistance, was on loan to Irish banks on October 28th.

This was €5.5 billion lower than the level recorded at the end of September, and represents the first time this category of lending has dropped below the €50 billion mark since last November.

The figures, which cover both domestic institutions and international banks with operations in Ireland, also show funding to Irish banks from the European Central Bank (ECB) crept up last month, to €100.9 billion from about €100.4 billion in September.

However, this increase in short-term ECB funding was not enough to account for the sector’s reduced dependence on Irish Central Bank funding.

Rather, the decline is believed to be due to a shift by Irish banks towards market funding, as well as the generation of funds through the disposal of assets as part of the plan to deleverage €73 billion in loans and other assets.

Despite this improvement, the Irish banking sector remains one of the main recipients of ECB funding. The total amount on loan to euro zone banks currently stands at €408.5 billion.

The loss of deposits at Irish banks, which began in September 2010, resulted in a surge in borrowing from the ECB. This peaked last November, when Irish banks were in receipt of € 136.4 billion.

However the sector’s dependence on the ECB has declined significantly since the start of the year.