Ireland lenders behind spike in ECB overnight lending
Anglo Irish Bank and Irish Nationwide Building Society have tapped emergency overnight borrowing from the ECB as they prepare to sell their remaining deposit assets
Two of Ireland’s most troubled lenders were behind a dramatic rise in emergency lending by the European Central Bank last week.
Anglo Irish Bank and Irish Nationwide Building Society tapped the overnight money as part of plans to wind down and sell off their remaining deposits.
Reuters reported that emergency overnight borrowing from the ECB jumped to more than €15bn, a 20-month high, on Thursday.
Overnight borrowing from the ECB is usually well below €1bn. This year, emergency overnight borrowing has been above €1bn only twice, both times last week, the agency reported.
A spokesman for Anglo Irish said the bank had “no comment” to make on market operations.
However, it is understood that Anglo Irish and Irish Nationwide Building Society have shifted from using the ECB’s normal liquidity facility to the more expensive overnight money so that the underlying assets used as security would be available immediately for when a sale is agreed.
Ireland’s Central Bank, which is overseeing the two lenders’ restructuring, is due to begin auctioning off their remaining assets in the next few weeks.
Anglo Irish has recently said that its emergency borrowings from the ECB and Irish Central Bank stood at €45bn in 2010.
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