Bank debt burden talks under way

Discussions are believed to be under way between the Government and officials at the European Financial Stability Facility on a possible way of reducing the cost of Ireland’s bank debt burden.

It would involve creating an EFSF bond which could potentially be used as collateral to allow the Irish Bank Resolution Corporation to access the ECB’s normal bank financing structures and the normal low-cost ongoing financing from which it is currently excluded. Such a bond could potentially help wean the IBRC off the emergency liquidity assistance which the bank currently sources from Ireland’s Central Bank.

According to RTÉ, the plan would eliminate the need for the IBRC to rely on the expensive emergency funding mechanism.