Irish Central Bank Governor Patrick Honohan said the loss of wealth in Ireland could hurt the economy by reducing access tocredit.
“Given how depleted personal wealth of many families who would have, in more normal times, been able to fund start-ups and small expansions with their own risk capital resources, the lack of bank credit is likely to be a more serious drag on the recovery than it might otherwise be, ‘’ he said in a speech in Dublin today.
‘‘Government has arranged to recapitalise the main banks with fiscal injections almost unmatched – as a percentage of national GDP – in World history,’’ he said, outlining the state response to the lack of credit. ‘‘The Central Bank, supported by the Eurosystem, has provided open-ended liquidity to ensure that shortage of liquid assets cannot have been a constraint on lending.’’
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