Honohan: Crisis ‘75% home-grown’

Central Bank Governor Patrick Honohan has said Ireland's financial crisis was "three-quarters home-grown".

Speaking to a major financial conference in Trinity College, Dublin today, Mr Honohan said however that many of the problems took place in an international context.

He added that there are many “researchable lessons” to be learned from what he called “the great financial crisis".

“Our own experience in Ireland has many international financial ramifications,” Mr Honohans said.

“For, even if I have been emphasising recently how much of Ireland’s banking difficulties were home grown, they have certainly occurred in an international context.”

Describing Ireland as one of the most globalised economies in the world, Mr Honohan said our property price and construction bubble was financed to an important extent from abroad.

He added that from 2003 to 2008 net indebtedness of the banks to the rest of the world jumped from 10% of GDP to over 60%.

Mr Honohan said there was a “myth” that “a new economic era was unfolding”, which served to drive unrealistic expectations of economic growth.