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External Balance Sheet Risks in Ireland

Author

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  • Galstyan, Vahagn

    (Central Bank of Ireland)

  • Herzberg, Valerie

    (Central Bank of Ireland)

Abstract

Large external imbalances have been a persistent feature of most advanced economies, including Ireland. This is despite significant deleveraging of the Irish banking sector since the financial crisis. Given the presence of internationally oriented activities with little Irelandrelated business, early-warning indicator metrics related to the international investment position require adjustments in order to serve as useful monitoring tools.We propose to focus on a metric related to the net external debt liabilities of a narrow set of domestic Irish banks: a closer monitoring of the external balance-sheet risk is warranted when the net external debt liabilities of domestic banks exceed 17 per cent of modified gross national income.

Suggested Citation

  • Galstyan, Vahagn & Herzberg, Valerie, 2018. "External Balance Sheet Risks in Ireland," Financial Stability Notes 9/FS/18, Central Bank of Ireland.
  • Handle: RePEc:cbi:fsnote:9/fs/18
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    References listed on IDEAS

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    Cited by:

    1. Philip R. Lane, 2019. "Globalisation: A Macro-Financial Perspective," The Economic and Social Review, Economic and Social Studies, vol. 50(2), pages 249-263.

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