ECB on banks and public finances

The latest ECB Monthly Bulletin carries an interesting special article on the impact of banking-sector rescue policies on public finances across the euro area: you can read it here.

3 replies on “ECB on banks and public finances”

“IMF estimates show that Sweden was able to reach
a recovery rate of 94.4% of budgetary outlays
five years after the 1991 crisis, while Japan
had recovered only about 1% of the budgetary
outlays five years after the 1997 crisis.
However, by 2008 the recovery rate for Japan
had increased to 54%.”
We cannot know what the recovery rate for Ireland might be in 5 or 10 years time. Any insights out there on whether Ireland will end up more like Japan than Sweden?

I would have thought ours would be more like Japan as didn’t Sweden devalue their currency so as to boost inflation and thereby get a quicker return?? Not sure what path Japan went down…….and of course we cannot devalue our currency now.

Table 2 in this Bulletin shows the unprecedented extent of our bank guarantee. It amounts to 214.8% of GDP (even though guarantees on retail deposits are not included).

Brian Lenihan told Vincent Browne that Greece had followed our lead in their bank guarantee. So how come their guarantee amounts to just 0.6% of GDP?

Comments are closed.