This is the new Irish currency. And the ECBank likes it, because it's inherently lucky.I always knew the Irish had a way to beat the rap for their banking follies. They're such an irrepressible lot of leprechauns.
Cos67 ¬(%^D>
checkitout:
http://www.businessinsider.com/fianna-filed-ireland-prints-25-of-its-gdp-in-german-euro-2011-1
Fianna Fáiled: Ireland Prints 25% of its GDP in German Euro
Jack H. Barnes, Confessions of a Macro Contrarian | Jan. 17, 2011, 8:06 PM
Read more: http://www.businessinsider.com/fianna-filed-ireland-prints-25-of-its-gdp-in-german-euro-2011-1#ixzz1BnydOqXq
The Celtic Tiger has been on the economic ropes since the crash of 2008. In the first hours of the crisis, the US Federal Reserve provided emergency funding to Irish banks, pouring 10’s of Billions of US dollars into the Irish Banking system, providing funds as needed. These funding events helped stabilize the banks, during the winter of 08-09.
“The scale of AIB’s borrowing from the scheme is enormous given its relatively small size in the US. Barclays Bank, which bought Lehman’s US operations out of bankruptcy, borrowed $232bn (€174 bn) from the Fed scheme.”
AIB’s biggest single loan — $3.3bn (€2.48bn) — was borrowed from the Fed on July 2, 2009.
The ECB setup a unique Sovereign bond carry with Irish banks, allowing support for their financing needs via deposits of Irish Sovereign bonds held as collateral. This mechanize broke down in the fall of 2010 as liquidity dried up beyond the capacity of the ECB to help out.
The Washington Post has a great graphic that shows Europe’s Financial contagion as cross holdings through both Banking and through Trade . The implications are clear, the cross holdings are significant.
The ECB is reported to have provided up to 130+ Billion Euros in direct support to the Irish banks, by allowing the banks to park Irish Sovereign debt at the ECB for collateral. This has driven up the internal leverage of the ECB enough that it needed to be recapitalized with new funds in December 2010.
The fact that the ECB needed to be recapitalized just as the impact from the Irish bailout of November hit home to the political leaders, though the real context of it was missed by the main stream media. The EU appears to have been caught in a situation that it could not contain the Irish funding needs, while needing to recapitalize the ECB Balance sheet to continue operations.
“The capital increase was deemed appropriate in view of increased volatility in foreign exchange rates, interest rates and gold prices as well as credit risk,” the E.C.B. said in a statement.
Ireland Central Bank was allowed, with or with out permission, to print up up new Euros without new sovereign debt issued behind them. By December of 2010, the EU appears to have been more worried about the appearance of the ECB balance sheet as a whole, than of rogue individual activity by its member states.
[and so on]
