Saturday 7 December 2019

Central Bank not due credit for any profits, says its chief

Laura Noonan

THE Central Bank shouldn't "take any credit for" notching up profits of €1.2bn last year since the massive earnings were the result of an "ill wind" that had to blow somebody some good, Governor Patrick Honohan said yesterday.

The comments came as it emerged that Mr Honohan gifted €42,000 of his salary to the Exchequer last year and will gift another €63,000 this year, leaving him with a 2012 pay cheque of €213,000 -- €37,000 less than deputy governor Stefan Gerlach and €127,000 less than deputy governor Matthew Elderfield.

The higher earnings meant the Central Bank was able to give almost €960m to the Exchequer in 2011, well up on the €670m contribution made the previous year.

"I don't think we should take any credit in this building for the large profits," Mr Honohan said. "It's an ill wind that blows nobody some good and the Central Bank actually benefits from some of the (crisis measures)."

The bulk of the Central Bank's extra profits come from providing emergency funding to Irish banks that haven't got good enough collateral to draw money from the ECB's "main" operations.

The Central Bank was providing €42.4bn of that liquidity at the end of last year, and earned €1.6bn for its efforts. Much of that €1.6bn came from state-owned IBRC (formerly Anglo Irish Bank and Irish Nationwide) and nationalised AIB -- so it's effectively money that went from one arm of the State to another.

There was a €12.5m rise in the Central Bank's salaries and allowances, as a massive recruitment drive continued.

Irish Independent

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