Ireland Gets A Warning From ECU
Posted By thestatedtruth.com on December 20, 2010
Isn’t it a little late for the ECU to be threatening about things here, the horse is already out of the barn! Does the ECU have an alternate plan or set of options here….Nope, that’s just what we thought, none!
The European Central Bank warned Ireland that proposed legislation revamping the country’s financial system could threaten some of the ECB’s operations, and pressed Irish officials for assurances that the central bank’s collateral rights will be protected.
The central bank chastised Dublin for its handling of two banks at the heart of Ireland’s crisis, Anglo Irish Bank Corp. and Irish Nationwide Building Society. Draft legislation aiming to restore those banks to financial health “appears to go beyond the position agreed with the IMF and the European Commission in liaison with the ECB, which envisaged a specific resolution plan for these two non viable banks,” the ECB said.
The ECB is concerned about its heavy exposure to Ireland. Though Ireland makes up less than 2% of euro-zone GDP, it accounts for about a quarter of ECB lending to euro-zone commercial banks as Ireland’s banks are increasingly shut out of the interbank lending market. In addition, Irish banks have borrowed about €40 billion ($53 billion) through emergency liquidity assistance available from the Irish central bank.
In the wake of Ireland’s €67.5 billion rescue package agreed to last month with the European Union and International Monetary Fund, the ECB decided to continue making unlimited loans available to banks throughout the currency bloc, at the ECB’s low interest rate, through at least the first quarter of 2011.
Parts from www.thewallstreetjournal.com
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