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Banking Crisis Economic Performance

Balance Sheets

Brian Lucey and Constantin Gurdgiev write in today’s Irish Times about the scale of debt liabilities for various sectors in the Irish economy and illustrate that Irish firms and households have high levels of debt relative to international standards: you can read their contribution here.

A useful complement to their analysis is to examine the balance sheet statements for the various sectors, since the sustainability of debt depends on asset levels and the dynamics of asset valuations (major asset declines in 2008!). The CSO has made considerable progress in recent years in producing estimates of balance sheets for each sector in Ireland: you can read the latest report here and download the data here.

1 reply on “Balance Sheets”

Philip Lane is right to draw attention to the additional detail that can be found in the CSO Financial Accounts results. It is important to note that in Ireland the sector whose indebtedness is being discussed in the Irish Times article of 3 February by Prof Lucey and Dr Gurdgiev is dominated by the non-bank financial institutions, IFSC and other. The broad category “Other sectors” in the CSO External Debt statistics that is the source of many of the IMF figures drawn on in the article corresponds to the Financial Accounts categories “Non-bank financial institutions” (ESA sectors S.123, S.124 and S.125) together with the Households etc (S.14/15) sector and the part of the Non-financial Corporate (S.11) sector other than (inward and outward) direct investment companies. The external and total indebtedness of the households and indigenous non-financial corporate sector is therefore very much less than the figures quoted in the article.

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