THE FINANCIAL system’s dependence on European Central Bank funding was at its lowest level in almost two years in July, the Central Bank said yesterday.
New data showed a decline in banks’ borrowings from the ECB operations of €3.9 billion.
The figures indicated that dependence on emergency liquidity assistance (ELA) from the Irish Central Bank was also lower, falling by €800 million in the month. Among the banks guaranteed by the Government, combined ECB and ELA funding stood at €102.5 billion, down from a peak of €146 billion in March 2011.
Yesterday’s figures also show household lending was 3.6 per cent lower over the year. Home loans continued to fall, declining by 2.1 per cent compared with July 2011, and lending for consumption and other purposes was 7.8 per cent lower.
The latest figures from the Central Bank showed lending to households was down by €471 million over the month, as loans for consumption fell by €225 million. Mortgages were down €157 million, while loans to households for other purposes declined by €88 million.
July also saw a 4.5 per cent annual increase in personal spending on credit cards, the first in four years, according to Dan McLaughlin of Bank of Ireland. “Consumer confidence has picked up steadily since the spring and August showed a rise to 70 from 67.7, taking the index to the highest level since October 2007,” he said. In the business market, lending to non-financial corporates was down by 3.4 per cent in the year to the end of July.
