[Ex Finance Minister] Lenihan Says ECB Forced Ireland to Seek Bailout - Bloomberg
By Joe Brennan - Apr 23, 2011 10:46 AM GMT+0200
"Ireland was forced by the European Central Bank into seeking an international bailout in November, the Irish Times cited Brian Lenihan, then finance minister, as saying in an interview.
Lenihan said that it was “damaging” and a “betrayal” how some ECB governing council members briefed some media about Ireland, the paper said in a report published today.
Ajai Chopra, deputy director for Europe at the International Monetary Fund, said external authorities were “trying to avoid a situation where you had a fully fledged bank run” as the IMF and European Union shaped the aid package, the Irish Times cites Chopra as saying in an interview."
Well, well, Mr. Lenihan, how times have changed. It would seem that you are suffering from the same condition of 'Convenient Amnesia' that your successor in office - Minister Noon, is suffering from. Allow me to remind you what Deputy Brady said on your behalf to Senator Norris in the Seanad just over a year ago:
"The Financial Regulator imposes quantitative and qualitative standards for liquidity for all credit institutions that it supervises, be they credit institutions operating in the domestic market or those operating in international markets...The Financial Regulator also has a role in monitoring the functioning of liquidity within branches of credit institutions operating in Ireland where these are supervised by their home country regulator. The Financial Regulator maintains close communication with the regulators of other member states for this purpose.
....The importance of good liquidity management to the soundness of individual institutions and the financial system as a whole has been made abundantly clear from events throughout the recent financial crisis. The crisis clearly highlighted that, without good liquidity management principles and practices, financial institutions would quickly find themselves under stress and unable to meet their obligations. Internationally, the ample supply of liquidity in the years preceding the onset of the financial crisis in 2007 left many credit institutions unprepared for the shocks that occurred and many credit institutions struggled to maintain adequate liquidity throughout the financial crisis. For this reason, the European Central Bank and other central banks have been providing extraordinary liquidity support for financial institutions throughout the eurozone during the current financial crisis. These measures were introduced at the discretion of the ECB to deal with the liquidity crisis affecting the European-wide banking system. Irish credit institutions and many European credit institutions have obtained liquidity support [47]provided by the bank. However, dependence on ECB lending has been significantly reduced, indicating that conditions in international financial markets have improved substantially and Irish credit institutions have benefited from improved funding conditions which has been reflected in reduced recourse by Irish banks to Eurosystem funding. The ECB has indicated publicly that it is engaging in the progressive, timely and gradual phasing out of the non-conventional measures which were introduced in response to the financial crisis but that, notwithstanding this, liquidity support will remain for months to come. As such, there are no negative implications in the medium term from the announced “phasing out” measures. "
So, Mr. Lenihan, apart for the fact that the "phasing out" of liquidity assistance was reversed, full-speed, into trying to plug the hemorrhaging condition of the Irish banks by the ECB/IMF only NINE months after you made this statement that "Irish credit institutions have benefited from improved funding conditions", how come you're 'not friends any-more' with your ECB mates? Why have you waited this long to make this confession? Could you not make it while still in office? Who was stopping you? Brian Cowen? Ollie Rehn?
