Nationwide's access to ECB liquidity cut due to tougher guidelines
Irish Nationwide's access to ECB liquidity has been cut back even further as the building society, now part of Anglo Irish Bank, increases its reliance on local Irish Central Bank sources instead.
The lender has securitised a large pool of Irish mortgages which until recently were eligible collateral for liquidity from the ECB.
However, the Frankfurt-based bank now needs a second credit rating for any collateral it takes, leaving the lender reliant on the Irish Central Bank.
It has also emerged that Irish Nationwide has been forced to substitute €62m of mortgages in the pool due to the high level of arrears.
Under an agreement struck when the original loans were securitised, loans with persistent arrears must be replaced with good loans which are up-to-date.
The pool of mortgages was securitised -- effectively packaged up for investors -- in 2009 at the height of the financial crisis.
Two sets of notes were issued to investors who are entitled to repayments paid by mortgage holders.
As of March of 2010 more than 6pc of the mortgages in the pool were in arrears.
In August the Irish Independent reported that Anglo Irish (now IBRC) had ordered a review of the Irish Nationwide mortgage book.
Anglo wants to sell the book in the "medium term" as part of its overall attempt to shrink its own balance sheet.
The INBS loan book is worth €1.94bn, with €1.4bn in ordinary residential loans and the rest of the mortgages held by buy-to-let investors.