Amidst the excitement of the stress test announcements yesterday, you might have missed the monthly Central Bank of Ireland publication of the financial position of Irish banks as at the end of February, 2011 which provides an up to date picture of deposits. In summary, deposits continue to flee our banks, at a reduced pace overall compared with late last year but deposits from the private sector in the six State-guaranteed banks (see below) reduced at an alarming rate from €111.9bn to €108.6bn, 3% in one month. The deposits seem to be moving to non-State guaranteed banks though overall there is still €1.7bn less private sector deposits in all Irish banks, between January and February 2011 – perhaps debts are being paid off or the money is being transferred overseas. I am at a loss to square the claims by the IMF and others that deposits are “sticky” – as far as I can see deposit flight from the State-guaranteed banks is accelerating.
There are three tables which cover (1) all banks (2) banks that serve the domestic economy and (3) “covered institutions”, that is, the State-guaranteed banks
All banks operating in Ireland (including those located in the IFSC and which don’t serve the domestic economy – complete list here)
Domestic Irish banks (some 20 financial institutions which serve the domestic economy – list here)
State-guaranteed banks (Allied Irish Banks [AIB], Anglo Irish Bank [“Anglo”], Bank of Ireland, the Educational Building Society [EBS], Irish Life and Permanent and Irish Nationwide Building Society [INBS])
(1) Monetary Financial Institutions (MFIs) refers to credit institutions, as defined in Community Law, money market funds, and other resident financial institutions whose business is to receive deposits and/or close substitutes for deposits from entities other than MFIs, and, for their own account (at least in economic terms), to grant credits and/or to make investments in securities. Since January 2009, credit institutions include Credit Unions as regulated by the Registrar of Credit Unions. Under ESA 95, the Eurosystem (including the Central Bank of Ireland) and other non-euro area national central banks are included in the MFI institutional sector. In the tables presented here, however, central banks are not included in the loans and deposits series with respect to MFI counterparties.
(2) NR Euro are Non-Resident European depositors
(3) NR Row are Non-Resident Rest of World depositors (ie outside Europe)
NAMA Wine Lake 
What is the total of national debt + NAMA debt + CBI funding + ECB funding to Irish banks? Thanks.
@Frank,
net national debt €96bn according to NTMA at end Feb 2011 but there is no detailed breakdown and I wonder if it includes IMF/EU bailout of €15bn received to end Feb 2011, have a look yourself (http://www.ntma.ie/home.php)
NAMA debt €31bn NAMA bonds
CBI funding €70bn at end Feb 2011
ECB funding to Irish banks €117bn at end Feb
Thanks. That’s a total of 314bil. The tax take is 35bil. Out of curiosity, is it even theoretically possible to repay it? Has the government produced a plan anywhere that outlines how it will be repaid? I don’t even see mention of interest pmts in the budget.
Even at a rate of 3%, it could never be repaid.
Deposits are flying out the door for the same reason Anglo stock went down in ’07 & ’08. The market’s the best predictor of what’s going to happen. The writing’s on the wall.
@Frank, be careful with the figures. NAMA bonds are backed by assets held by NAMA, ditto with ECB and CBI advances to the banks. The only “pure” national debt is that recorded by the NTMA and that is presently at €96m.
@NWL,
I understand what you’re saying but it’s really just semantics. A collateralized debt obligation is still a debt obligation, right? Most of the assets that are backing the debt can’t be readily monetized.
It’s 96bil only if you assume NAMA will work and the ECB/CBI funding will either be replaced by another party or all of the loans it’s offsetting will be repaid and no new loans are generated. Surely the ECB won’t leave this overnight funding in place forever.
Even if one doesn’t technically regard it as debt, there still has to be a plan to replace it.
Speaking for myself – I moved amounts equal to the pre state guarantee level in a few banks during the late summer of 2007 when the derivatives mess was all over the FT.
Soon after moved to the Post office but a Year of NAMA mumbo jumbo , the summers/geithner duo across the Atlantic and lets not forget the ECBs Papal infallibility doctrine – decided it was time to get the hell out of Dodge.
I still have some in the Post office but this new extraction mechanism put in place means these funds may be drained on a collective basis to feed European banks while keeping a sence of order – exactly what the priests want.
It is no longer a question of bank failure but of state abdication of its duty to wage war against enemies both foregin and domestic.
It is also no longer a moral action to keep funds with the state as it no longer exists if indeed it ever did.
Simply put there is only so much surplus that can go round – this madness must end soon as a breakdown crisis awaits us at the end of this yellow brick road.
There’s a simple mechanism to stop this – “Let justice be done though the heavens fall”.
But lets face it it ain’t going to happen.
The progression is following a predictable path perhaps preordained to create a sence of final crisis
NO JUSTICE , NO FATE , NO MONEY.
Multiple Choice Exit Exam
If you were a recent Irish college graduate, which would you select.
a) stick around Ireland for 10 or 20 years with no hope doing anything productive.
b) go to Canada and a have a high probability of getting a good job, using the skills you spent four years learning.
c) go to Australia and a have a high probability of getting a good job, using the skills you spent four years learning.
d) either b or c.
What deposit flight? Just look at the top of Pg31 from yesterdays CBI prose…
“A maximum annual growth in deposits of 0% was
specified, based on a conservative projection of market growth and taking account of the fact that
outflows of deposits from less stable foreign and corporate sources had already largely stabilised by the
beginning of the forecast period.”
I wonder does ‘less stable’ in CBI parlance equate to ‘more financially aware and don’t believe the spin, cause its my ‘effin money’ in the real world?
Don’t know what ye are all on about,
sur’ everything will be grand…
everything will be grand… (rock yourself forward and backwards for that extra bit of comfort)
everything will be grand….
p.s. @ JW
if you were under 40, in negative equity, lost your job and your options are,
stick it out grimly for 10 years in the hope of getting back to ‘ZERO’, OR,
walk away to b or c and start at ZERO tomorrow.
FF, FG, Labour, PDs, Greens – just about every political party that has been in power since the beginning of the state are effectively saying that the banks are more important than the citizen, the citizen in handy for footing the bill though.
[…] Namawinelake.wordpress.com […]
A related phenomena – I had to laugh at Mark Coleman on New stalk.
He wants to increase the already huge trade surplus even more by cutting wages again.
These monetarists seem to fail to understand that under a socialised private now public banking system this austerity further degrades the assets on their balance sheet – recycling the crap back to the same workers again.
Where do we get these guys ?
The problem is simply a huge shadow banking system seeking rent at all costs.
Without sovergin money this country is going to be raped repeatedly by trade defect countries seeking to maintain their standard of living.
(Germany is a anomaly given the fact the Bundesbank is a completly private CB which imposes austerity domestically to serve its clients)
You must be reading the figures wrong… we are an island, after all, so deposits can’t leave.
Wasn’t there an issue with the interpretation of the covered institutions statistics regarding deposits?
That they were unconsolidated and therefore we could be counting money which left AIB and went to EBS as an outflow?
@Rob, I did contact the CBI last month when they first produced statistics for the “covered institutions” (the six State-guaranteed financial institutions, AIB, Anglo, BoI, EBS, ILP and INBS) and the response that I received would not support what you say. The statistics from the CBI show the balances at the covered institutioons at the end of February 2011. So if AIB had €100 at the end of Jan and EBS had €50 and there was a movement of €10 from AIB to EBS during February then that would still mean that the balances were €150 (€90 at AIB and €60 at EBS). Putting an accountant’s hat on, I was unable to understand the qualification from the CBI when they said “an example for where there may be differences between the group consolidated position and the gross positions presented in Table A.4.2 for private sector deposits/loans would be where the corporate group, e.g. AIB Group, Bank of Ireland Group, Irish Life and Permanent Group, Anglo Irish Bank Group, etc., would include entities which do not have a banking licence and as such are not monetary financial institutions. These entities would be in the ‘private-sector’ from a monetary statistics point of view”
So in summary, I still take the positions in table A4.2 to be the balances of the covered institutions and to believe that there was a €3bn decline in private sector deposits during February 2011.
Hmm, okay thank you for that.
I do note Dan O’Brien in the IT on Friday made the same deduction as you without feeling the need to put in the “unconsolidated” qualification. So I would suggest you are in good company.
Still a little unsure about what the limits of interpretation on the covered figures actually are then!
@Rob, I take the figures to mean that there was €108bn of deposits in the six “covered institutions” at the end of February, 2011. That’s what the *balance* sheet shows.
Sure, sorry what I meant was compared to the other two categories:
– e.g. What can the consolidated “Domestic Credit Institutions” data tell me that the unconsolidated “Covered Institutions” data can’t?