Banks operating in Ireland (i.e. both covered and non-covered banks)
continue to reduce their level of borrowing from the ECB. During January the funding drawn via the ECB refinancing operations declined by
€0.9 billion (1.2%) to €70.1 billion –
its lowest level since September 2008.
Year-on-year, funding drawn from the ECB has reduced by €22.6 billion or 24%. The reduction from peak (end November 2010) is €66.4 billion or 49%.
Covered Banks usage of Eurosystem funding
Drawings from the ECB by Covered Banks (excluding IBRC) declined by €0.7 billion (or 1%) during the month of January. This reduction in January was primarily as a result of AIB and PTSB raising €1.1 billion in new funding from capital markets.
Year-on-year borrowing by the covered banks from the ECB is down €18.3 billion (28%) to stand at €48.1 billion at end-January. The steady decline in reliance on ECB funding reflects the continued strengthening of the banking system, albeit from a weak base. The reduction in borrowing from the ECB has been achieved through managed deleveraging, deposit gathering and the return of AIB, BOI and PTSB to international funding markets.
The continued decline in ECB borrowing, on a sustainable basis, demonstrates the stability in deposit volumes and the progress being made in restructuring the domestic banking sector.
Drivers of reliance on Eurosystem funding by the Covered Banks
Importantly since November, all of the Covered Banks, AIB, Bank of Ireland and Permanent TSB have returned to international debt markets raising €2.6 billion in new funding from covered bonds and capital market transactions, secured on Irish collateral.
Share of total ECB funding
The share of total ECB funding by banks in Ireland has declined steadily from a peak in November 2010 of c.26.5% immediately after the bailout to 6.2% at end January 2013. The covered banks (excluding IBRC) account for c.4.2% of total Eurosystem funding at end-January 2013, down from a peak of c.18.8%.
Next publication date
14/03/2013 February ECB Funding note
16/04/2013 March ECB Funding note
14/05/2013 April ECB Funding Note