Bloomberg News

Irish Central Bank Says Lenders’ Deleveraging to Stay Unchanged

February 15, 2012

Feb. 15 (Bloomberg) -- Ireland’s lenders must stick to existing plans to shrink their loan books by the end of 2013, even as regulators plan to change the method for calculating the level of banks’ leverage, a spokeswoman for the central bank said.

The country’s lenders that remain open for business were ordered in March to sell or run down over 70 billion euros of loans by the end of 2013 to cut their loan-to-deposit ratios to 122.5 percent from an average 180 percent in December 2010.

Irish authorities plan to replace loan-to-deposit targets from June with a so-called net stable funding ratio, in line with Basel III liquidity requirements, the government said yesterday. This measure aims to limit the mismatch between the duration of banks loans and funding to ensure they don’t face liquidity shortages.

The banks’ deleveraging “will proceed as originally planned,” the central bank spokeswoman said in an e-mailed response to questions.

To contact the reporter on this story: Joe Brennan in Dublin at jbrennan29@bloomberg.net

To contact the editor responsible for this story: Finbarr Flynn at fflynn3@bloomberg.net


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