The lead story in today’s Irish Times carries the headline “Overseas deposits at Irish banks increase significantly”. Well, here’s a chart showing non-resident deposits for the three definitions of the Irish banking sector published by the Central Bank: All Banks, Domestic Group (which excludes IFSC banks) and Covered Banks.
How many of you can see the series increasing significantly at the last data point, in the usual sense of the word, meaning a large increase? It appears the headline reflects the following wording provided by Dan O’Brien (who would not have written the headline): “The small but significant increase in deposits …” In other words, Dan is saying that overseas deposits didn’t rise significantly but the small uptick could potentially be a good sign for the future.
Beyond the headline (sub-editor screwups seem to be very common at newspapers) what’s odd about the story is that even though the latest data on overseas and resident deposits don’t show much more than a continuation of recent trends, the rest of the piece treats the release as though something interesting has happened, including the obligatory crowing from Minister Noonan:
The Central Bank statistics on deposits point to a stabilisation of the Irish financial system. Responding to the developments, Minister for Finance Michael Noonan said the “deposit figures illustrate growing national and international confidence in the Irish banking system. It is particularly impressive that the deposit position of the Irish banks has improved at a time of such global uncertainty.”
He described the cash inflows as an “an endorsement of the Government’s restructuring of the banking system. This restructuring has reduced the cost of the banks to the State and has also seen the banks beginning to access international money markets without the benefit of the State guarantee.”
For those interested in actually seeing what’s going on with deposits (yes I know the chart above is rubbish — I don’t know how other people get decent quality graphs up on this site!) here’s a Powerpoint presentation (also here in grimer PDF) with charts for total deposits, non-resident deposits, resident deposits, and private sector resident deposits. In addition to the Total/Domestic/Covered breakdown, I’ve provided charts for an IFSC/Domestic Non-Covered/Covered breakdown.
I surmise from these charts that the non-resident withdrawals have largely tailed off and that the trend for resident deposits in the covered banks remains a downward one.