His article is here.
Author: Philip Lane
Eoin Dorgan’s letter in the FT this morning provides a useful reminder of the distribution of assets in the Irish banking system. Monday’s FT article used the Central Bank data on ‘domestic credit market institutions’ – the total assets of this group stood at €776 billion at end June. Eoin Dorgan points out that the total assets of the ‘six domestically owned banks’ (I presume he means the six institutions covered by the guarantee) was €523 billion at end June. The non-covered institutions (Ulster Bank, Danske, Bank of Scotland Ireland etc) account for one third of total assets and any comprehensive analysis of the expansion, collapse and restructuring of the Irish banking system needs to incorporate this category.
The full list of domestic credit market institutions is available here.
The press release is here.
In this new IIIS DP, Agustin Benetrix and I looked at the covariates of the shifts in fiscal outcomes between 2007 and 2009.
The abstract is:
We examine the cross-country dispersion in fiscal outcomes during 2007-2009. In principle, international differences in fiscal policy may be related to differences in optimal fiscal positions, funding constraints, political economy factors and fiscal control problems. We find that the decline in the overall and structural fiscal balances have been larger for those countries experiencing larger increases in unemployment and where credit growth during the pre-crisis period was more rapid. However, there is no systematic co-variation between fiscal outcomes and a larger number of other macroeconomic variables and country characteristics.
Kevin Daly’s piece is below:
European Views: Ireland – Old News, New News, and Breaking the ‘Vicious Circle’
September 9, 2010
Irish bond spreads have widened significantly in recent weeks, driven by fears over the cost of bailing out the banking system and the nationalised Anglo Irish Bank in particular. Some of this is old news (the government’s estimate of the cost of bailing out Anglo was first announced six months ago) and the Irish government argues – credibly, in our view – that the costs of bailing out the bank are “infuriating but manageable”. However, the rise in Ireland’s borrowing costs has now created a dangerous dynamic of its own, which needs to be addressed with some urgency. Providing an independent estimate of the bailout costs will be an important first step. In addition, the Irish government should (and, we expect, will) accelerate the speed of its fiscal adjustment.
Background: Rise in Irish Bond Spreads on Costs of Anglo Bailout