IDEAS home Printed from
   My bibliography  Save this article

Resolving Ireland’s Banking Crisis


  • Honohan, Patrick

    (Trinity College Dublin and CEPR)


The Irish banking system has been, in effect, on a life-support system since September 2008. Complacency resulted in the banks fuelling the late stage of an obvious construction bubble with massive foreign borrowing, leaving them exposed to solvency and liquidity risks which in past times would have been inconceivable. The Government’s steps to put the system back on a sound basis must have regard both to protecting taxpayers’ interests and to ensuring that credit flows to the economy are not hampered by inadequate capital or liquidity.

Suggested Citation

  • Honohan, Patrick, 2009. "Resolving Ireland’s Banking Crisis," The Economic and Social Review, Economic and Social Studies, vol. 40(2), pages 207-231.
  • Handle: RePEc:eso:journl:v:40:y:2009:i:2:p:207-231

    Download full text from publisher

    File URL:
    File Function: First version, 2009
    Download Restriction: no

    References listed on IDEAS

    1. Honohan, Patrick & Klingebiel, Daniela, 2003. "The fiscal cost implications of an accommodating approach to banking crises," Journal of Banking & Finance, Elsevier, vol. 27(8), pages 1539-1560, August.
    2. Maurice J. Roche, 1999. "Irish House Prices - Will the Roof Cave In?," The Economic and Social Review, Economic and Social Studies, vol. 30(4), pages 343-362.
    3. George A. Akerlof & Paul M. Romer, 1993. "Looting: The Economic Underworld of Bankruptcy for Profit," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 24(2), pages 1-74.
    4. International Monetary Fund, 2006. "Ireland; Financial System Stability Assessment Update," IMF Staff Country Reports 06/292, International Monetary Fund.
    5. Patrick Honohan & Anthony J. Leddin, 2006. "Ireland in EMU - More Shocks, Less Insulation?," The Economic and Social Review, Economic and Social Studies, vol. 37(2), pages 263-294.
    6. Kelly, Morgan, 2007. "On the likely Extent of Falls in Irish House Prices," Quarterly Economic Commentary: Special Articles, Economic and Social Research Institute (ESRI), vol. 2007(2-Summer), pages 42-54.
    7. Caprio, Gerard & Honohan, Patrick, 2001. "Finance for Growth: Policy Choices in a Volatile World," MPRA Paper 9929, University Library of Munich, Germany.
    8. Alan Ahearne & Naoki Shinada, 2005. "Zombie firms and economic stagnation in Japan," International Economics and Economic Policy, Springer, vol. 2(4), pages 363-381, December.
    9. E. Paul Durrenberger, 2005. "Labour," Chapters,in: A Handbook of Economic Anthropology, chapter 8 Edward Elgar Publishing.
    10. Gary H. Stern & Ron J. Feldman, 2003. "Too big to fail: the hazards of bank bailouts," The Region, Federal Reserve Bank of Minneapolis, issue Dec, pages 60-65.
    11. David Duffy & John Fitz Gerald & Ide Kearney, 2005. "Rising House Prices in an Open Labour Market," The Economic and Social Review, Economic and Social Studies, vol. 36(3), pages 251-272.
    12. FitzGerald, John, 2005. "The Irish Housing Stock: Growth in Number of Vacant Dwellings," Quarterly Economic Commentary: Special Articles, Economic and Social Research Institute (ESRI), vol. 2005(1-Spring), pages 1-22.
    13. Fabian Valencia & Luc Laeven, 2008. "Systemic Banking Crises; A New Database," IMF Working Papers 08/224, International Monetary Fund.
    14. P. Honohan, 2000. "Banking System Failures in Developing and Transition Countries: Diagnosis and Prediction," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 29(1), pages 83-109, February.
    15. World Bank, 2001. "Finance for Growth : Policy Choices in a Volatile World," World Bank Publications, The World Bank, number 13895.
    Full references (including those not matched with items on IDEAS)


    Blog mentions

    As found by, the blog aggregator for Economics research:
    1. Bertie Ahern's Farewell Speech
      by Liam Delaney in Geary Behaviour Centre on 2011-01-01 00:18:00


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Karl Whelan, 2010. "Policy Lessons from Ireland’s Latest Depression," The Economic and Social Review, Economic and Social Studies, vol. 41(2), pages 225-254.
    2. Connor, Gregory & Flavin, Thomas & O’Kelly, Brian, 2012. "The U.S. and Irish credit crises: Their distinctive differences and common features," Journal of International Money and Finance, Elsevier, vol. 31(1), pages 60-79.
    3. Gorecki, Paul K., 2009. "The Recession, Budgets, Competition, and Regulation: Should the State Supply Bespoke Protection?," Papers BP2010/2, Economic and Social Research Institute (ESRI).
    4. Gregory Connor, 2009. "The Risky Lending Gap," Economics, Finance and Accounting Department Working Paper Series n2010809.pdf, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
    5. Mac an Bhaird, Ciarán, 2013. "Demand for debt and equity before and after the financial crisis," Research in International Business and Finance, Elsevier, vol. 28(C), pages 105-117.
    6. Kenneth Patrick Vincent O'Sullivan & Stephen Kinsella, 2013. "Financial and regulatory failure: The case of Ireland," Journal of Banking Regulation, Palgrave Macmillan, vol. 14(1), pages 1-15, January.
    7. Donnellan, T. & Hanrahan, K. & Breen, James P. & Gillespie, P., 2013. "Climate Change and Agricultural Policy Coherence: Agricultural Growth and GHG Emissions in Ireland," 87th Annual Conference, April 8-10, 2013, Warwick University, Coventry, UK 158853, Agricultural Economics Society.
    8. Honohan, Patrick & Donovan, Donal & Gorecki, Paul & Mottiar, Rafique, 2010. "The Irish Banking Crisis: Regulatory and Financial Stability Policy," MPRA Paper 24896, University Library of Munich, Germany.
    9. repec:kap:jbuset:v:146:y:2017:i:4:d:10.1007_s10551-016-3238-z is not listed on IDEAS
    10. Hauck, Achim & Neyer, Ulrike & Vieten, Thomas, 2015. "Reestablishing stability and avoiding a credit crunch: Comparing different bad bank schemes," The Quarterly Review of Economics and Finance, Elsevier, vol. 57(C), pages 116-128.
    11. repec:esr:chaptr:jacb200962 is not listed on IDEAS
    12. Coates, Dermot & Everett, Mary, 2013. "Profiling the Cross-Border Funding of the Irish Banking System," Economic Letters 04/EL/13, Central Bank of Ireland.
    13. Mary M. Everett, 2015. "Blowing the Bubble: The Global Funding of the Irish Credit Boom," The Economic and Social Review, Economic and Social Studies, vol. 46(3), pages 339-365.
    14. Clancy, Daragh & Merola, Rossana, 2014. "The effect of macroprudential policy on endogenous credit cycles," Research Technical Papers 15/RT/14, Central Bank of Ireland.
    15. Honohan, Patrick, 2016. "Debt and austerity: Post-crisis lessons from Ireland," Journal of Financial Stability, Elsevier, vol. 24(C), pages 149-157.
    16. International Monetary Fund, 2016. "Ireland: Financial Sector Assessment Program; Technical Note-Stress Testing the Banking System," IMF Staff Country Reports 16/315, International Monetary Fund.
    17. Lunn, Pete, 2011. "The Role of Decision-Making Biases in Ireland's Banking Crisis," Papers WP389, Economic and Social Research Institute (ESRI).
    18. Thorsten Beck, 2014. "Ireland's Banking System - Looking Forward," The Economic and Social Review, Economic and Social Studies, vol. 45(1), pages 113-134.

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eso:journl:v:40:y:2009:i:2:p:207-231. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Martina Lawless). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.