FRESH figures out today could show that Irish banks' reliance on emergency liquidity has plunged by "about €12bn", according to a report from Barclays Capital.
Irish banks hit headlines across the globe last month when it emerged that they were being kept afloat by close to €50bn of emergency liquidity assistance (ELA).
The ELA scheme allows the Central Bank of Ireland (CBI) to continue to give cash to banks that have run out of high-quality assets to pledge as collateral with the European Central Bank (ECB).
It's controversial since it sees the risk of the cash being transferred from the eurozone (which bears the risk for ECB liquidity operations) to the State (which 'explicitly' guarantees ELA).
In a note issued earlier this week, Barclays says they "suspect" that the amount of ELA advanced to Irish banks has been "decreasing recently by about €12bn to €35 to €40bn".
Analysts Laurent Fransolet and Guiseppe Maraffino say the fall was achieved because Irish banks were able to issue €14bn of short-dated government guarantee bonds in late January.
Those government guaranteed bonds are understood to have been "own use" bonds -- a complex financial transaction that allows banks to issue bonds to themselves, and pledge them with the ECB as collateral.
Because the own-use bonds pushed up the amount of ECB-eligible collateral banks had, they were able to get more money from the ECB at its recent auctions.
"From a presentational point of view, this is better for Ireland and the ECB," Barclays said in the note. "It is also more advantageous for the banks since the cost of ELA is much higher than the cost of ECB [operations]."