Domestic lenders’ ECB borrowings rise 38pc
Published 01/11/2010 | 12:38
Irish domestic lenders increased their reliance on European Central Bank funding in September, with borrowing from the institution surging 38pc.
The ECB funding reliance by domestic lenders, including Irish and foreign-owned retail banks in Ireland, rose by €23bn to €83bn from a month earlier, according to an emailed statement from the Central Bank in Dublin today.
The overall ECB funding dependence of Irish-based credit institutions, including internationally focused banks with operations in Ireland, rose 27pc to €121.1bn, it said.
ECB policy makers have warned banks against depending on the central bank’s funds.
Council member Mario Draghi said on October 1 that there are “certain banks” that have become “highly dependent on the liquidity injected by the euro system.” He said this should be addressed by national authorities to avoid “zombie banks.”
The Central Bank report also showed that lending to households fell 4.5pc in September from a year earlier, accelerating from a 4.2pc decline in August.
Lending to the non-financial corporate sector declined by 3pc in the year through September, compared with a 2.2pc drop in August, it said.