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Profiling the Cross-Border Funding of the Irish Banking System


  • Coates, Dermot

    (Central Bank of Ireland)

  • Everett, Mary

    (Central Bank of Ireland)


Between 2002 and 2008, there was a surge in foreign funding ows to the Irish banking system. This unprecedented increase in in ows was a key driver of the credit boom in Ireland. In the wake of the domestic banking and global nancial crises, the Irish banking system experienced a sharp decrease in its foreign wholesale funding. This Economic Letter addresses two primary questions: (i) who funded the Irish banking system during the boom?; and (ii) how did foreign funding contract in the post-September 2008 environment? The UK and the international interbank market are found to be the predominant funding sources for the Irish banking system during the credit boom. Funding originating from banks in the UK accounted for the most pronounced contraction.

Suggested Citation

  • Coates, Dermot & Everett, Mary, 2013. "Profiling the Cross-Border Funding of the Irish Banking System," Economic Letters 04/EL/13, Central Bank of Ireland.
  • Handle: RePEc:cbi:ecolet:04/el/13

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    References listed on IDEAS

    1. Forbes, Kristin J. & Warnock, Francis E., 2012. "Capital flow waves: Surges, stops, flight, and retrenchment," Journal of International Economics, Elsevier, vol. 88(2), pages 235-251.
    2. Portes, Richard & Rey, Helene, 2005. "The determinants of cross-border equity flows," Journal of International Economics, Elsevier, vol. 65(2), pages 269-296, March.
    3. Gian‐Maria Milesi‐Ferretti & Cédric Tille, 2011. "The great retrenchment: international capital flows during the global financial crisis," Economic Policy, CEPR;CES;MSH, vol. 26(66), pages 285-342, April.
    4. Claudia M. Buch, 2005. "Distance and International Banking," Review of International Economics, Wiley Blackwell, vol. 13(4), pages 787-804, September.
    5. Silvia Merler & Jean Pisani-Ferry, 2012. "Sudden Stops in the Euro Area," Review of Economics and Institutions, Università di Perugia, vol. 3(3).
    6. Honohan, Patrick, 2009. "Resolving Ireland’s Banking Crisis," The Economic and Social Review, Economic and Social Studies, vol. 40(2), pages 207-231.
    7. International Monetary Fund, 2010. "European Financial Linkages; A New Look At Imbalances," IMF Working Papers 10/295, International Monetary Fund.
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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. 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.
    3. Niall McInerney, 2016. "A Structural Model of Macroprudential Policy: the Case of Ireland," EcoMod2016 9643, EcoMod.
    4. Gerlach-Kristen, Petra & Mc Inerney, Niall, 2014. "The Role of Credit in the Housing Market," Papers WP495, Economic and Social Research Institute (ESRI).
    5. 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.
    6. 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.
    7. Clancy, Daragh & Merola, Rossana, 2017. "Countercyclical capital rules for small open economies," Journal of Macroeconomics, Elsevier, vol. 54(PB), pages 332-351.
    8. Patrick Honohan, 2016. "The Old Connection Sundered? Ireland and the UK since 1916," Trinity Economics Papers tep1416, Trinity College Dublin, Department of Economics, revised Sep 2016.

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