Credit where credit is due
THE acknowledgement by a member of the European Central Bank's executive board that our financial institutions have weathered the worst of the economic storm is a welcome endorsement at a critical time. Jose Manuel Gonzalez-Paramo believes that measures taken to stabilise Irish banking, the nation's finances and the rolling-out of NAMA are slowly restoring confidence.
All things being equal, this should mean that our banks can return to the interbank market for normal funding needs. The difficulty is that there is nothing normal about the wider economy at the moment. But things could undoubtedly be a good deal worse -- one need only look at the crisis in Greece.
Mr Gonzalez-Paramo sees NAMA as an appropriate mechanism for propping up our banks. However, he held out little hope for a quick fix, pointing out that our banks must de-risk their balance sheets before they will be in a position to start lending again.