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Modelling the corporate deposits of Irish financial institutions: 2009 - 2010

Author

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  • McQuinn, Kieran

    (Central Bank of Ireland)

  • Woods, Maria

    (Central Bank of Ireland)

Abstract

This paper examines the corporate funding flows of Irish credit institutions over the period 2009 to end-2010. The analysis examines the daily net movement across the consolidated corporate and retail deposit books of the domestic Irish banking sector and models these flows as a function of bank specific measures of risk, sovereign influences and general macro-financial conditions. The international financial crisis resulted in Irish banking institutions experiencing more acute funding difficulties than institutions elsewhere. Over the period 1995 to 2007, Irish credit institutions had engaged in a remarkable surge in concentrated lending to the commercial and residential property sector. The collapse in prices and activity in both markets post-2007 coupled with the downturn in general economic activity are the main reasons why Irish banks now rely substantially on liquidity support from the ECB and the Irish Central Bank. This situation is clearly unsustainable in the longer term and, in returning these institutions to a more viable longer-term path of market based funding, a greater understanding of the deposit flows of financial institutions is required.

Suggested Citation

  • McQuinn, Kieran & Woods, Maria, 2012. "Modelling the corporate deposits of Irish financial institutions: 2009 - 2010," Research Technical Papers 02/RT/12, Central Bank of Ireland.
    • Handle: RePEc:cbi:wpaper:02/rt/12
    as

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    File URL: https://centralbank.ie/docs/default-source/publications/research-technical-papers/research-technical-paper-02rt12.pdf?sfvrsn=8
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    References listed on IDEAS

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    Cited by:

    1. Ching-Wai (Jeremy) Chiu & John Hill, 2018. "The Rate Elasticity of Retail Deposits in the United Kingdom: A Macroeconomic Investigation," International Journal of Central Banking, International Journal of Central Banking, vol. 14(2), pages 113-158, March.

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    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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