Thursday 21 November 2019

Honohan appeals for debt solutions

Laura Noonan

CENTRAL Bank Governor Patrick Honohan has repeated appeals for the international community to apply "more imagination" in devising a solution for Ireland's financial crisis.

The governor's latest comments were published by influential US paper the 'Wall Street Journal' yesterday and follow a similar theme to an article Mr Honohan recently penned for the 'Financial Times'.

In the 'Wall Street Journal' piece, Ireland's most powerful banker said the medicine applied to Ireland so far was "plain-vanilla sort of financial arrangements.

"More imagination is needed, and I expect to see that over the coming months and years," he said, though he stopped short of criticising the current regime.

The governor has previously spoken of the merits of creating an insurance scheme that would boost market confidence by capping Ireland's exposure to future banking losses.

Mr Honohan also wrote in the 'Financial Times' about the prospect of a scheme where Ireland's loan repayments would be linked to the country's economic growth.

A spokesman for the European Central Bank last night declined to comment on whether the ECB was working on any more "imaginative" schemes to deal with the financial crisis.

Yesterday's 'Wall Street Journal' also said Mr Honohan "declined more than one invitation to express his personal confidence" that the timetable for Ireland's return to money markets in 2012 can be met.

A spokeswoman for the Central Bank declined to make any further comment.

In a recent interview, the bank's head of financial regulation Matthew Elderfield said Ireland "may get some market interest in a couple of years".

The ECB spokesman declined to comment on Ireland's return to financial markets, but ECB president Jean Claude Trichet has said his "working assumption" is that Ireland can follow the bailout plan.

A spokesman for the International Monetary Fund could not be reached for comment.

Irish Independent

Also in Business