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Blowing the Bubble: The Global Funding of the Irish Credit Boom

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  • Mary M. Everett

    (Central Bank of Ireland, Dublin)

Abstract

European global banks played a significant role in the international transmission of liquidity during the period prior to the global financial crisis. This paper examines how European global banks channelled finance, raised in US wholesale funding markets, via cross-border banking flows to Irish retail banks during the first decade of the euro. The results indicate that global factors, namely the US-sourced funding of European global banks and global risk, were influential in driving cross-border banking inflows to Ireland. Furthermore, the empirical analysis suggests these global factors contributed to changes in domestic private non-financial sector credit during the Irish credit boom. These results shed new light on the factors influencing the international funding of Irish retail banks and changes in domestic credit during the credit boom.

Suggested Citation

  • 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.
  • Handle: RePEc:eso:journl:v:46:y:2015:i:3:p:339-365
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    Cited by:

    1. Philip R. Lane, 2015. "The Funding of the Irish Domestic Banking System During the Boom," Trinity Economics Papers tep0515, Trinity College Dublin, Department of Economics.
    2. 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.
    3. Lane, Philip R., 2015. "The Funding of the Irish Domestic Banking System During the Boom," CEPR Discussion Papers 10777, C.E.P.R. Discussion Papers.

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    Keywords

    banking; credit boom; Ireland;

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