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Archive for April 8th, 2011

Following on from new Minister for Finance, Michael Noonan’s puzzlingly ambiguous reassurance about deposits at AIB and Bank of Ireland since last week’s stress test and restructuring announcements, numbers released by the Central Bank of Ireland (CBI) later today are set to give a steer on changes to deposit levels in March 2011. We will need root out the deerstalker and meerschaum though, because the data will not show new deposit levels, merely the amount of support to the Irish banking sector from the ECB and CBI, but this should be indicative of funding sources and therefore of deposit movement.

Unfortunately the data will be for the period ending 31st March, 2011 and will therefore exclude the aftermath of the presentations on the stress tests and bank restructuring, given by governor of the CBI, Patrick Honohan and separately the Minister, to the Dail – both were delivered after the markets closed on 31st March. We will need to wait for the second week in May at the earliest to officially find out from scheduled releases how ECB and CBI funding reacted to the announcements.

So what today’s publication will show will be the extent of ECB and CBI support to the total Irish banking sector, including foreign banks that don’t service the domestic economy. This funding has been at an elevated level since September 2008 but has been at more than €150bn combined since last September 2010. There seems to have been a trend in recent months whereby CBI support has increased whilst ECB exposure has reduced. This entry will be updated later today and I leave you with the recent history of ECB and CBI funding.

UPDATE: 8th April, 2011. The latest release from the CBI is now available here. In brief it shows that to the 25th March 2011, both ECB and CBI funding of Irish banks had dropped by €2.4bn and €3.3bn respectively. Total central bank support to all Irish banks stood at €181.3bn at the 25th March. On the face of it, this shows an easing in funding pressures on Irish banks but I wonder if the AIB receipt of €3.2bn in respect of its disposal of Polish operation Bank Zachodni might have made it into the March numbers. Also it is still unclear how the €7bn deposit in February 2011  from outgoing Minister Lenihan might have affected figures.

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