Ireland avails of secret banks arrangement for debt swap

Ireland is making use of a secret arrangement between eurozone central banks to ensure its controversial debt swap doesn’t fall foul of a ban on monetary state financing, according to sources.

There are limits on how many of its own government’s bonds a eurozone central bank can hold in its investment portfolio to make sure it doesn’t directly finance the state, the people said on condition of anonymity.

The Irish central bank risked exceeding that limit when it assumed €25bn of government debt as a result of Ireland’s seizure of Anglo Irish Bank Corp, they said.