THE LEVEL of borrowing by Irish financial institutions from the European Central Bank (ECB) remains “a far cry from the hyped-up” level claimed in a report by a US bank, according to Goodbody Stockbrokers.
Eamonn Hughes, analyst at Goodbody, said that his “best guess” was that the share of ECB bank funding for the four Irish quoted banks was below Ireland’s share of European economy.
Goodbody examined ECB borrowings in response to a report from US bank JP Morgan, which concluded that Irish financial institutions had a disproportionately higher level of borrowing than banks in other countries.
JP Morgan concluded that ECB borrowing by Irish banks had doubled in the last year and equalled almost a quarter of Irish GDP.
Mr Hughes said: “Our best guess is that the share of ECB outstanding of the four main quoted banks is below Ireland’s share of EU GDP of 2 per cent and probably closer to 1 per cent.
“Or expressed another way, at about 4 per cent of our own GDP, it remains a far cry from the hyped-up 25 per cent level.”
The total amount owing to the ECB by Irish financial institutions, including IFSC-based banks in Dublin, rose to €44 billion last month. This represented 9 per cent of all ECB borrowings.
Mr Hughes said non-clearing foreign banks in Ireland account for €18-€19 billion, reducing the Irish share of ECB funding to 5 per cent. He said Irish retail clearing banks, including AIB, Bank of Ireland and Ulster Bank, account for €1 billion or 0.2 per cent of all ECB borrowing, while Irish mortgage banks account for 3.5 per cent or €16.8 billion.
