In the previous post, I discussed changes in irish banking system systemic stability in 2012 (January-November). But here's a longer range view - from September 2010 on through November 2012.
Now, keep in mind: since September 2010, Irish banks had
- Massive recaps (2011-2012)
- Full reform and deleveraging programmes, approved by the EU and Irish authorities
- Rounds of increases in charges on customers to beef their own interest margins
- Vast subsidies from the ECB and CBofI
- Subsidies from the Government via deposits (see here)
- According to the Government, BofI (largest bank) has completed its deleveraging programme, while AIB (second largest bank) is ahead of target
- Massive sales of riskiest assets to Nama that crystalized losses and led to recaps, which are now completed
- According to the Government have bee operating in more benign environment of property prices stabilization
- Benefited from a 88% rally in Government bonds which they stuffed onto their balancesheet over 2010-present like there is no tomorrow
- The large scale balance sheet restructuring has been completed;
- BOI have completed the disposal of non-core portfolios
- AIB have substantially completed their disposals.
- The funding gap has been significantly reduced and the drawing on Eurosystem funding by our government supported going-concern banks continues to decline, and is now less than €60 billion (excluding IBRC).
- Importantly, as I said earlier deposits are growing and the banks are back in the funding markets."