The Irish Central Bank has developed a new data series that shows the consolidated foreign claims of the six domestically-active banks headquartered in Ireland (ie it does not include the activities of the affiliates of UK banks in Ireland and it corresponds to the list of ‘guaranteed’ banks).
This note clarifies the vast differences between these claims and those reported in the BIS database.
7 replies on “The Consolidated Foreign Claims of the Irish Banks”
Things that make you go hmm…. Chart 9…
Oops, I was looking at it backwards. This is how much dem furriners owe our lovely Irish banks, isn’t it?
If the “Irish” banks grew too big for the Irish economy, what is reflected in these charts is the other side of the equation?
That is the extent to which the Irish banks are funding overseas assets based on centralised bank funding. The problem is that funding for these overseas assets has now been landed unfairly but squarely on the Irish taxpayers.
Is it correct to say that if all bank overseas assets were liquidated at book value, the €207 billion would be an increase in the liquidity in the “Irish” banks?
It is exactly.
A little strange since all the media coverage when the last BIS figures were release focused on how much Ireland owes the foreign banks.
Am I reading it correctly that only 16% of the €207bn is owed to Irish banks by other banks (credit institutions p1)?
On the non-domestic front:
“Lloyds Banking Group and Royal Bank of Scotland shares tumbled on Friday after Lloyds said it had effectively written-off more than half of its outstanding loans to Irish borrowers. “
“A little strange since all the media coverage when the last BIS figures were release focused on how much Ireland owes the foreign banks.”
And like derivative positions, seeing gross exposures on either side of the balance sheet is far more informative than seeing either net figures or only the asset side. I think seeing the credit side would be useful, for better or worse.
“Am I reading it correctly that only 16% of the €207bn is owed to Irish banks by other banks (credit institutions p1)?”
Yes. You can see more on this in Chart 5 which gives the country breakdown. There could be an element of mad counting in this, I suppose, with Bank X being owed y billions by wholly owned subsidiary of Bank X in the UK, for example?
If not, then Irish banks have been enthusiastic buyers of other bank bonds; I can’t quite believe that they have huge amounts on deposit overseas, unless there is a regulatory requirement. I wonder does regulatory capital come under this heading?
Biggest chunk of the total is UK individuals non-credit prvate sector.
I imagine the biggest chunk of that subtotal is Northern Ireland household mortgages and business loans.
NI employment relies heavily on public sector jobs, which are scheduled for significant cuts. More writedowns to come ?