Bank Run In Ireland

The Irish government is still playing hard to get. Until yesterday, it  refused to concede that a bail out was needed – and that's remarkable given that the EU/ECB/IMF delegations were already on their way to Dublin. 

This morning the FT reports that that corporate customers have been pulling out their deposits from Irish banks, amid signs of fading confidence in the banking system. Irish Life & Permanent said corporate customers had withdrawn €600m, more than 11% of total deposits, during August and September. The FT report says there is evidence that another deposit crunch is happening right now, as confidence faded that the Irish banking sector is able to fund itself if, and when the ECB scales backs its emergency funding.  But even the  ECB funding had not been sufficient as Irish central bank had to provide €20bn in exceptional liquidity assistance outside the ECB programme. And, wait for it, Brian Lenihan, the Irish finance ministers, tells the world that the Irish banks had no funding difficulties.