ECB says Central Bank should speed up IBRC bond sales
The Central Bank should speed up the sale of government bonds it took on when Irish Bank Resolution Corporation (IBRC) was liquidated, according to the European Central Bank (ECB)
In its annual report published yesterday the ECB said last year's sale of a portion of the €25bn of bonds was "a step in the direction of the necessary full disposal of these assets."
"However, a more ambitious sales schedule, in particular for the long-duration floating rate notes, would further mitigate the persisting serious monetary financing concerns," it said.
In its previous annual report the ECB said Ireland breached European Union rules by failing to consult in advance about the law to liquidate IBRC and replace its debts to the Central Bank.
The deal allowed the so-called Anglo Irish Bank promissory notes to be scrapped. It was "noted" rather than approved by the ECB, which said the Central Bank must sell the bonds it holds as soon as practicable - to remove the perception it is a lender to the Government.
Last year the National Treasury Management Agency (NTMA) bought €500m of the bonds from the Central Bank, allowing the debt to be cancelled and so saving on interest.
Ironically, the ECB has launched a far more dramatic bond acquisition programme which has a target to buy about €60bn a month, mostly of euro area government debt.