Irish-based banks’ reliance on ECB in decline

Irish-based banks’ reliance on emergency funding fell to the lowest level in almost 18 months at the end of January after borrowings from the European Central Bank shrank by 14% on the previous month, data showed yesterday.

Irish banks, at the root of a financial crisis which led to an €85bn EU/IMF bailout in November 2010, are reliant on central bank loans to fund their day-to-day operations after losing tens of billions of euro in deposits and being largely excluded from wholesale lending markets.

The bulk of the loans from the ECB are to domestic Irish banks such as Bank of Ireland and AIB, but the overall figure also includes foreign subsidiaries based in Ireland.