Four lenders soon to be eased off Central Bank liquidity funds
THE Central Bank's controversial emergency liquidity scheme will soon be used solely to fund Anglo Irish Bank and Irish Nationwide, the Irish Independent has learnt.
The news will come as a relief to the taxpayer, who was once on the hook for some €70bn of government-guaranteed emer-gency support extended by the Central Bank to AIB, Bank of Ireland (BoI), EBS, Anglo, Nationwide and Permanent TSB.
Well-placed sources last night confirmed that this week's recapitalisation, which will put close to €20bn into the four 'continuing banks', is likely to see the quartet eased off emergency liquidity assistance or ELA within months.
AIB has already confirmed that it stopped drawing ELA in April, when the Government put €11bn of cash on deposit with the bank ahead of its July 31 bailout.
BoI and Irish Life & Permanent (IL&P) have already submitted plans to the Central Bank showing how they will get off ELA over the coming months, sources confirmed last night. BoI was believed to have reduced its reliance on ELA when it took in deposits of €3bn from the State in April.
IL&P, which is set for a €4bn recapitalisation at the weekend, would have seen a "very significant rise" in ELA had the High Court not forced the cash on the bank, the Department of Finance said in an affidavit this week.
IL&P's reliance on ELA is likely to reduce in the aftermath of that bailout.
A spokeswoman for the Central Bank declined to comment on the ELA operations, as did a spokesman for the Department of Finance.
A spokesman for the European Central Bank declined to comment on rumours that Frankfurt had been putting pressure on the Irish authorities to wind down "emergency" measures that have been in place for close to two years.