Emergency lending to banks hits €70 billion

Friday 11 March 2011 22.10
Central Bank figures - Big rise in emergency lending
Central Bank figures - Big rise in emergency lending

New figures show that there was a big jump in the amount of emergency support given to Irish banks by the Central Bank last month.

Central Bank figures show that, by the end of February, it had lent just over €70 billion to Irish banks. This was a big increase from just over €51 billion at the end of November.

The Central Bank said that more than half of the increase in the emergency lending - known as exceptional liquidity assistance (ELA) - was linked to a change in the rules under which the ECB lends money to banks. The bank said there was some 'additional temporary reliance' on ELA while banks adjusted to the ECB change.

The amount of loans to Irish banks from the European Central Bank fell sharply, standing at just under €117 billion, a drop of more than €9 billion from the previous month.

The ECB had been lending money to banks which could not raise funds normally on international markets, but it has indicated that it wants to wean banks off such emergency support.