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New ECB loans lift Irish banks

IRISH banks could be the big winners after the European Central Bank's decision to begin lending money for six months.

Irish institutions are among the biggest borrowers of ECB money, with drawings of €70bn between the six bailed-out banks alone, plus another €55bn of "emergency funding" channelled through the Irish Central Bank.

Analysts believe the move, which means doubling the time of its longest financing operation, would still be "welcomed" by banks here since "anything longer is better".

However, the Government was pushing for the 'medium-term liquidity' facility, and this decision doesn't go quite far enough.

The ECB has repeatedly spoken about its desire to end its "non-standard measures", complaining that banks had become "addicted" to cheap central bank liquidity.

The longest term available to them at present is three months, a "non-standard" measure introduced by Frankfurt after the money markets froze over in late 2008.


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