Bank system recovering slowly, says macro review

The Irish banking system is slowly on the mend, according the Central Bank’s latest macro financial review.

Deposits have increased by €7bn, or 5.3%, over the course of the year, while the banks continue to deleverage non-core assets. The amount covered by the eligible liabilities guarantee has dropped from €100bn in Sept 2011 to a current level of €78bn. The Government plans to phase it out over the first quarter of 2013, which costs the covered banks roughly €1bn in fees every year.

However, funding risks remain and the covered banks remain heavily reliant on official sector funding. Central Bank funding to the banks has fallen €10bn over the year to €97bn.