The Financial Times this morning carries the story of Sean FitzPatrick’s departure from Anglo Irish Bank. The article provides links to the “AIB Statement” and “AIB Chairman’s Statement.” There’s a reason the media in this country use Anglo as shorthand for Anglo Irish Bank.
Carmen Reinhart and Ken Rogoff have released a new cross-country empirical study “Banking Crises: An Equal Opportunity Menace“. Their analysis shows that the average fiscal impact of a banking crisis is to increase the level of public debt by 86 percent, such that the public debt nearly doubles. They also show that the typical duration of a housing bust is 4-6 years.
Such cross-country averages are useful benchmarks and it is useful to think about the reasons why the current Irish crisis might deviate from such patterns.
Update: Reinhart and Rogoff have also just released a much shorter companion paper “The Aftermath of Financial Crises” [to be presented at the January AEA meetings in San Francisco].
The Irish government’s economic recovery plan can be found here. This report has a wide-ranging agenda.
For university-based economists, the following section is especially interesting, since it may represent an important shift in the government’s approach to funding research:
“The creation of more concentrated research-intensive excellence will enhance the country’s reputation internationally and its ability to attract top-level researchers and will underline Ireland’s intentions in terms of the development of the Smart Economy. It will also enhance the international exposure of Irish
universities and institutes of technology.” (page 75)
A busy day for CSO releases. The quarterly national accounts are published here, while the BOP data are here. In addition, the CSO released the 2006-2007 data for services trade, which can found here.
A striking feature of the data is the wide divergence between GNP and GDP for Ireland, with the most worrying data point being the 0.9 percent decline in GNP during the 3rd quarter (corresponding to an approximately 3.6 percent contraction at an annualised rate). The widening of the current account deficit, despite the slowdown, signals the external competitiveness problem.
Statcentral.ie is a new CSO-maintained data site that brings together all the CSO data, plus data from a range of other official agencies.
Brendan Walsh was the guest on the Eamon Dunphy show last Saturday. You can listen to the interview (which covers the current crisis, amongst other topics) here.
CES Ifo’s latest quarterly Forum has just appeared with a special issue on the financial crisis with articles by Hans Werner Sinn, Barry Eichengreen, Martin Hellwig, and yours truly, among others.
Download it free at http://www.ifo.de/portal/page/portal/ifoHome/b-publ/b2journal/30publforum.
My piece develops the argument that containment and resolution policy started too slowly and emphasized liquidity rather than solvency issues. True of Ireland as elsewhere. Only now are some of us coming to terms with this.