We suspected Irish banks were the biggest beneficiary of European Central Bank emergency liquidity provision. This table I found in a research note I received from Royal Bank of Scotland shows by how far.
From their analysis of national central banks’ accounts, RBS economists estimate Ireland received an extra €60bn in liquidity from the ECB between June 2008 and August this year. That massive sum accounted for a quarter of the total increase and was equivalent to 36 per cent of Irish gross domestic product. It was also way above anything banks in other eurozone countries have received (although the “other” category is rather large in this table – even economists get tired of studying central banks’ balance sheets).
The broader point is how the ECB is dealing with a eurozone economy that is distinctly uneven. From a German or Dutch perspective, the withdrawal of extra liquidity provision might not seem a big factor. For Ireland, it’s a very different story.