Thursday, October 10, 2013

10/10/2013: IMF's GFSR October 2013: Focus on Lending

More interesting analysis from the IMF's GFSR (previously covered topics: banks and corporate debt overhang are linked here:

This time around: lending to the economy. One chart:

Note that Ireland is a euro area outlier in terms of the huge extent of policy supports one demand side for credit and simultaneously above average support on supply side of credit:

Puzzled? Me too. Yes, we have huge number of various programmes, grants, schemes, incentives for funding supply and demand. Most of it is not in the form of credit, but rather equity - e.g. Enterprise Ireland funding. No, we don't have much of credit supply supports when it comes to policies or institutions relating to banks. We have lots of hot air talking about the need for banks to lend, more hot air on various 'checks' as to whether banks are lending or not… etc. So let's take a look at the table where the IMF gets its ideas on the above policies existence:

Per table above, Ireland has produced policies of Household Debt Restructuring. Wake me up here, folks, cause I am apparently living in some different Ireland from the one visited by the IMF. Oh, and yes, we also have put in place new policies on Corporate Debt Restructuring. What are these? Hiding our heads in the sand as companies go to the wall? Or may be these are policies promised on dealing with upward-only rent reviews which have driven thousands of companies into the ditch?

I think the IMF folks need to get out a bit more often… before compiling reports...

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