Decrease in loans for bailed-out banks 'reflects system's strength'
EMERGENCY loans from the European Central Bank (ECB) to the State's bailed-out banks have fallen by almost a half in the last year, figures show.
ECB borrowing fell 2pc during June but was down 46pc on June of last year, according to the latest data from the Department of Finance.
It is now at its lowest level since September 2008.
The department said the steady decline reflected the strengthening of the banking system.
"The reduction in borrowing from the ECB has been achieved through managed deleveraging, deposit gathering and the return of AIB, Bank of Ireland and Permanent TSB to international funding markets," the department said.
Year-on-year borrowing from the ECB is down €30bn to stand at €34.76bn at the end of June.
Reducing Ireland's need for the loans has been a priority under the EU/IMF bailout and will be one factor looked at in the final assessment of the banking system before the rescue ends later this year.
Meanwhile, deposit volumes remained stable last month at €152.03bn, although they are down fractionally on June 2012.
The end of the banking guarantee has had an insignificant impact on deposits, the department said.
It also said that the weakening of sterling continued to affect deposit balances in the UK.
"Deposit balances – other than UK – remain flat, most notably due to the lower interest rate environment and the improving funding position of the covered banks, which has eased competition for deposits," the department said.
Underlying deposits, other than the UK balances, are up €1.4bn in the year to date, offset by lower deposits in the UK of about €2.9bn.