Moody’s holds negative outlook for Irish banks

CREDIT rating agency Moody’s has retained its negative outlook for Ireland’s banks, as it said state recapitalisation only partly offset weak funding and liquidity profiles and a challenging business environment.

The Government has put almost €63 billion into Irish banks following the disastrous property binge and believes its latest recapitalisation drive, following fresh stress tests in March, drew a line under the banking crisis.

However, Irish banks are still reliant on the Central Bank for almost €50 billion of emergency funding and on the European Central Bank for over twice that, due to tens of billions of euro in deposit outflows and their inability to raise money on the interbank lending markets.