Banks raise EU borrowing by almost 40pc
Irish banks have been forced to increase their borrowing from the European Central Bank (ECB) by almost 40pc to €83bn in September as stresses in the markets intensify.
Figures released by the Central Bank show that domestic banks increased their borrowings from the European authorities by €23bn in September, as the banks sought to avoid a so-called funding "wall of worry''.
The figures indicate that for most Irish banks the conventional sources of long-term funding -- the issue of bonds and private placements of debt -- have effectively dried up, although Bank of Ireland this week managed to issue a large bond successfully. The ECB allows Irish banks to lodge collateral with the Frankfurt bank in exchange for funding spread over various maturities.
Some ECB members want to see such funding being phased out, but president Jean Claude Trichet has resisted this argument.
Ireland's share of borrowing is among the highest in the eurozone, even though we represents only about 2pc of that region's GDP. Greek, Irish and Spanish banks have the highest dependence on the ECB.