After taking bonuses, the Irish banks are now seizing money from Ireland’s central bank. In urgent need for cash, banks such as Allied Irish Bank (nyse:aib) and the Bank of Ireland (nyse:ire) are now using unknown funds – not from European Central Bank (ECB) but rather the local one.
The Telegraph reports that the vast sums are on top of the ECB money and this is how it’s done:
The latest data shows that Anglo Irish Bank and other lenders had borrowed €51bn (£43bn) from the Irish central bank by the end of December, under an obscure progamme listed in the balance sheet as “other assets”.
This mess is joined by a challenge that Irish Prime Minister Brian Cowen faces from within his party. The Irish crisis, alongside the Greek one, are far from over.
EUR/USD managed to recover last week, but is still below tough resistance.
Further reading:
- Irish Bank Defaults Ahead?
- Allied Irish Banks Scavenging Before Haircut
- Bank of Ireland Haircut