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€40 Billion Deposit Flight In December Brings Total Irish Bank Run To €110 Billion For 2010

Tyler Durden's picture


No matter how hard the ECB is trying to mask the fact that the only way to rescue Europe is through yet another ponzi scheme, which has a CDO in its foundation no less, depositors refuse to be fooled. According to the ECB, in December Irish banks lost deposits worth €40.3 billion, over 50% more than November, when €26.7 billion evacuated the banking system. The brings the total deposit flight from Ireland's 15 retail banks to a massive €110 billion, a number which if indexed to the US, would be well in the trillions. And as the Independent points out, "The most dramatic element of the latest data, however, is the sharp
acceleration in the fight of deposits from the so-called 'domestic
group' of banks." In other words, Irish banks are likely operating on liquidity fumes, and all of their operations continue to be funded on a day to day basis by the ECB and possible the IMF. And what is even worse, is that just like in the US, Irish consumer refuse to relever: "Yesterday's figures also show another contraction in banks' lending, as loans to households fell by 5.2pc and loans to non-financial companies fell 1.2pc in the year to December."

From The Independent:

AN unprecedented €40bn of deposits was withdrawn from Irish banks in December, dwarfing the flight in deposits earlier in 2010.

December's massive deposit exodus means a total of almost €110bn has been taken out of Ireland's 15 retail banks since the start of 2010.

The figures are revealed in monthly reports from the Central Bank, which show a marginal fall in lending in the year to December, as well as a €2.7bn fall in reliance on cheap cash from the European Central Bank (ECB).

In November, the group of 15 banks lost €26.7bn and by December the monthly rate of deposit loss soared to €40.3bn.

Not surprisingly, the Irish are all too aware ofjust how bad the situation is:

The depositors have little motivation to keep their funds in Ireland, and many have been spooked into withdrawing money as the credit ratings of Irish banks deteriorated.

The impact has been most sharp for deposits from outside the euro area, which fell by almost €34bn in December and €81bn in the full year.

Naturally, the ECB has been forced to step into the fray to prevent a wholesale Irish bank wipeout:

Banks have dealt with collapsing deposits by increasing their reliance on funds from the ECB, and emergency cash from Ireland's Central Bank.

Yesterday's data confirms the ECB's support to the domestic group fell by €2.7bn to €94bn in December.

The year-end position is still well ahead of ECB advances at the start of 2010, when supports were €58.5bn. Emergency support from the Central Bank of Ireland totalled about €49bn, up from €43bn in November.

And in summary:

"There is very little good news in these latest banking figures," said Bloxhams' chief economist Alan McQuaid.

"Until the banking sector crisis is fully resolved and things improve on the labour market front then the supply/demand for credit will remain subdued."

h/t Henri


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Wed, 02/02/2011 - 13:36 | 927906 Mr Lennon Hendrix
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Roll that debt, Bernanke!

Wed, 02/02/2011 - 13:40 | 927924 Racer
Racer's picture

And if Fine Gael get in they may cut some bondholders... bits off for a change..

Fri, 02/04/2011 - 08:00 | 934118 Marcus McSpartacus
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No they won't: FG regard anyone advocating such a position as "economically illiterate", this includes you and I. Pretty much the only people advocating such are Sinn Féin, who are saying - "apply a market solution to a market problem" and "burn the bondholders". So, to recap: the Irish establishment want private losses socialised into national debt-servitude, and the "fringe" leftwingers want the market solution.

Wed, 02/02/2011 - 13:44 | 927937 Commander Cody
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Everyone I know is deleveraging.  Join the party.  Starve the beast.  Party on!

Wed, 02/02/2011 - 14:30 | 928130 Logans_Run
Logans_Run's picture

I am with you CC! All that is left is about $10K of student loan debt. Housing costs reduced-check. PM increase-check. In a salute to my Irish ancestors I am going long scotch-particularly rarer single malts.

Wed, 02/02/2011 - 15:50 | 928407 THE DORK OF CORK
THE DORK OF CORK's picture

We don't make scotch.

Wed, 02/02/2011 - 16:53 | 928601 Commander Cody
Commander Cody's picture

Drink it?

Fri, 02/04/2011 - 08:13 | 934127 Marcus McSpartacus
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Be careful - sore subject. First: Scotch whisky by definition is from Scotland - usually distilled twice. Irish whiskey, is distilled three times - and is extra smooth as a result (that treacly Bourbon stuff is distilled only once). Secondly: during Prohibition in the US, the majority of bootlegged hootch was described for marketing purposes (even, unfortunately, the rotgut) as some variant of Irish Whiskey. Before Prohibition ended, Joe Kennedy - peace be upon him - bought up a load of Whisky - what you call "Scotch" (*spits*) - distillery licenses, and had legions of trucks full of the stuff lined up on the Canadian border, ready to roll in. Thus "Irish" Whiskey was effectively wiped out in the US. We are still sensitive about this: do not make this mistake in an Irish Pub.

Wed, 02/02/2011 - 18:33 | 928984 snowball777
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Uisce, prig.

Wed, 02/02/2011 - 15:25 | 928298 topcallingtroll
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Here comes the deflation monster.  He's BAAACK!

Wed, 02/02/2011 - 13:59 | 927998 Stroke
Stroke's picture

Get out your lawnchair...the end of the month should be something to see

Wed, 02/02/2011 - 13:59 | 928004 RobotTrader
RobotTrader's picture

Speculators are in the gambling mood today.

Look how they are HeatMapping up Fannie Mae today.


Next up:  Watch them start chasing the skirts of the Irish Banks:


Wed, 02/02/2011 - 14:28 | 928118 Spalding_Smailes
Spalding_Smailes's picture

This old trader and me, were at the bar and we
Were having us some beers and swappin' shorts
Talking barrick gold, silver wheaton and novagold
Old dogs and new shorts, and etf's we aint sold yet

We talked about ben's grace, and all the markets he raised
Then I heard the ol' man say
Ben is great, pomo is good, and the doomers are crazy

He said I fought two bear markets, been called on margin
What brings you to mpel, he said 4 bagger ya' know
We talked an hour or two, bout every miner we knew
What all well put them through, like two old traders will do

We pondered china and the peg, he lit a cigarette with a mining derivative i.o.u
Said these damn things will kill me yet
But ben is great, pomo is good, and doomers are crazy ....

Wed, 02/02/2011 - 14:32 | 928141 Hephasteus
Hephasteus's picture

Oh look. The company that owns nearly all the mortgages in US is  penny stock and it's being ramped from 65 cents to 68 cents.

Robo. Do you ever feel like that plastic rabbit on a pole. That keeps zipping around the dog track but all the grayhounds are off in a grass field far far away.


Wed, 02/02/2011 - 14:01 | 928008 kengland
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Completely irrelevant when you have a central bank willing and able to step in. The stories now are redundant and no longer meaningful. It's not a conspiracy. It's in your face and completely out in the open. Back in the day, this was something. You would have been reporting something material. Let's be as clear as water here...list off all of the crisis that have been papered over the last 24 months and where the market is now. If none of these can bring the beast down, nothing will. Telling the story as if you have found something meaningful is not stoping to understand everything you have reported over the last few years. It's all the same

Wed, 02/02/2011 - 14:12 | 928048 TheGreatPonzi
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I share the same frustration over the bullshit, unlimited postponing and lies coming from the central bank/government/media establishment since 2008.

Though, reporting the truth is still important.

Tyler is waiting for hyperinflation just like us, he doesn't think the establishment will suddenly stop their support measures towards a Ponzi which is threatening to collapse every day.

Shorting equities has always been dumb, and ZH never encouraged to do this. Equities != economy.

Wed, 02/02/2011 - 14:30 | 928125 kengland
kengland's picture

"Shorting equities has always been dumb, and ZH never encouraged to do this. Equities != economy"


I'm not so sure about that. They walk a very fine line. TD talks his book around here. Disclaimer and all that. He's responsible for all the content. Is the content not a proxy? How about Nic L? Why post information on set ups if you weren't talking your book? Reggie is the same way. Why post these folks if you aren't outlining your own position?

Wed, 02/02/2011 - 15:34 | 928330 Reggie Middleton
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You guys are hard to satisfy. I post what I feel is the most accurate analysis. Of course I will (not necessarily guaranteed, though I usually do since that's what the analysis is for) take a posistion on said research, but would you really trust it if I wouldn't? That's like my cooking dinner and telling you to eat it - I'm never hungry.

ZH is not necessarily a one trick pony either. If you are even the least bit objective you have to realize that much of the market has detached from fundamentals, and fundamentals essentially means being able to count the money. Despite this, Leo K. gets lots of play and has been bullish about practically everything, and nearly all of the time. Of course, I think he is wrong (particularly about Greece), but that's what makes a trade, isn't it? I have been massively bullish on certain mobile technologies, and bearish on other companies in the exact same sector. I go both ways (in investment philosophy, that is:-)

What should be the deciding factor is whether the info and analysis is pertinent and whether it holds water. My forte has always been valuation and asset picking. Unfortunately, I tend to rely on money and fundamentals to do such, and TPTB have made it very difficult for plain vanilla, count the potential profit, short the Ponzi, long/short stock pickers these days. Despite the shenanigans that abound, good strong analysis still offers some pretty good results, just a lot more perilous as compared to when we had real markets with fundamental buyers and sellers.

Wed, 02/02/2011 - 15:46 | 928378 kengland
kengland's picture

You are making my point RM. TD's sphere of influence or snapshot of his position is what he posts and what he allows to have posted. To those that argue he is not short equities or is cash/gold only ignore the influence behind the posts. The disclaimer should be taken literally. I have no problem with this. I'm just saying that he can be pinned down as being freaking WRONG.


By the way...

"I go both ways (in investment philosophy, that is:-)"


That pimpish look of yours make me wonder

Wed, 02/02/2011 - 15:19 | 928285 topcallingtroll
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I agree with you and wish zero hedge wasn't such a one trick pony.  I don't think it is all smooth sailing from here though.  I'm betting on gdp beating core in this horse race, but they are still running neck and neck.  If core gets ahead  while growth is still weak then Tyler will look timely still.  However I would prefer my contrarians to have more than one song they can play.  I know TD can do it.  I've seen it before.

Wed, 02/02/2011 - 21:25 | 929497 Double down
Double down's picture

Shallow.  This is not the site for a play by play. 

Markets do not have to adjust because someone points out structural risks or fraud.  TD points out accruals none look at.  It is a conscious choice to bear witness.


Wed, 02/02/2011 - 14:02 | 928010 sangell
sangell's picture

Who needs deposits when the ECB is letting the Irish Central bank create its own ersatz euros.

Wed, 02/02/2011 - 14:06 | 928018 kengland
kengland's picture

Exactly. We all know this is the game plan. Why anyone is shocked or frustrated at this point is beyond me. Did you expect anything different? If so why?

Wed, 02/02/2011 - 14:11 | 928038 DonutBoy
DonutBoy's picture

Yeah - that part's the mystery to me.  How can the Germans let that go on?

What are the domestic depositors doing with their Euros?  Surely not holding the paper.  I wonder what precious metals sales have been like in Ireland.

Wed, 02/02/2011 - 15:58 | 928433 THE DORK OF CORK
THE DORK OF CORK's picture

It means nothing - the currency is not lent out , its disappearing.

The money supply is falling.

They mean to crush us and protect the continental banks


The ECB are managing a controlled or semi - controlled deposit robbery of Irish deposits.

Risk reserves on banks mean nothing - Bank bonds own everything including the sov debt - the  ECBs policey of seniority of bank bonds over sov is telling us they consider the nation state a anachronism.

They had their fun with that experiment and now its over.

Wed, 02/02/2011 - 14:11 | 928049 john milton
john milton's picture

maybe the money went on sugar.

Sugar hits 30-year high as cyclone threatens Australian crop

Wed, 02/02/2011 - 14:14 | 928062 Dick Darlington
Dick Darlington's picture

Rehn to the rescue (of banks) with the nice and shiny tax payer backed ponzi monster vehicle. Politicians collectively think that the tax payers in other EMU-countries deserve to get some additional burden on top of their domestic ones. After all, spring is coming soon in Europe and bankers have to get some extra loot to spend while skiing in the Alps.

Wed, 02/02/2011 - 14:23 | 928086 HarryWanqer
HarryWanqer's picture

If you live in Ireland, do us all a favor and put your money back in the bank.  This is the safest place for it.  There should be laws against withdrawing all of one's money.

Wed, 02/02/2011 - 14:37 | 928152 Horatio Beanblower
Horatio Beanblower's picture

Feckin eejit.

Wed, 02/02/2011 - 15:09 | 928255 the not so migh...
the not so mighty maximiza's picture

People should be able to do whatever they fucken want with THEIR money.

Wed, 02/02/2011 - 15:33 | 928329 HarryWanqer
HarryWanqer's picture

Is it really THEIR money?  The central banks have the sole authority to print it and distribute it to the public.  It's illegal to deface it or give an excessive amount to someone else without informing the proper authorities.  The wealth the currency represents may be THEIRS, but the actually currency is not.

Wed, 02/02/2011 - 16:56 | 928610 Commander Cody
Commander Cody's picture

Sounds like a good argument for trading your fiat for....

Wed, 02/02/2011 - 15:14 | 928265 topcallingtroll
topcallingtroll's picture

No way is that you Harry!  The guy I have loved from afar, I mean if I really did love men, and not in a nasty way but in a good way.  That can't be Harry.  Hey Blog Police!  Hamy Wanger has found a way to hack into Harry Wanger's account.

Wed, 02/02/2011 - 18:23 | 928946 Ferg .
Ferg .'s picture

Alas this is not the HarryWanger . The Track section of his account says he's been a member of ZH for just over 6 weeks . The real HarryWanger has been around for considerably longer than that .

Wed, 02/02/2011 - 18:40 | 929005 snowball777
snowball777's picture

C'mon, troll....don't your recoqnize your own?

Wed, 02/02/2011 - 14:23 | 928097 Oh regional Indian
Oh regional Indian's picture

So the money issues will explode from the irish, who could not believe they had been branded tigers. And now, they're at the short end of the banking stick.

Very interesting to see the pattern in how we are slowly but surely sinking into the morass (No More ass), clearly the point of control are fear and sex.

Both of which, we've been taught, can be banished and re-plenished with money.

More Money = More sex and Less Fear.

What a perfect pitch.

Us suckers had no chance of any meaningful resistance.

Run money, run.


Wed, 02/02/2011 - 15:11 | 928260 topcallingtroll
topcallingtroll's picture

My original plan to sell 1000 year reich bonds and then use the proceeds to recapitalize  all the banks and sovereigns is sounding better all the time.  Then over the next 100 years have the ECB slowly monetize it.  Anybody got a better idea?  And no...collapse of civilization, pestilence, war....that's not a better idea, unless you are selling horses to the riders of the apocalypse.

Wed, 02/02/2011 - 19:01 | 929082 robertocarlos
robertocarlos's picture

They have horses for courses, they're the market forces. 

Wed, 02/02/2011 - 16:04 | 928458 gwar5
gwar5's picture

Wow, thanks for bringing that. Reminds me I still have a little work to do.

Wed, 02/02/2011 - 16:13 | 928459 THE DORK OF CORK
THE DORK OF CORK's picture

This is the ECB stating that they can do anything - don't fuck with us.

As long as people accept the Euro as money they will have power over us.


I get the feeling there was some amateurish behind the scenes attempt to take these guys on as I don't believe Brian Cowen is a bad man.

He should have had to guts to sacrifice himself and explain to the Irish people the nature of the money power on live television.

He is still Taoiseach - I am begging him to do it  - he can redeem some respect from us if he tells us the truth.

Get some reliable men from the Army ranger wing to protect his family or something - just fucking tell us.


Wed, 02/02/2011 - 17:19 | 928673 Fred Hayek
Fred Hayek's picture

Is it really a matter of revealing anything at this point?

Don't the informed citizens of the country know damn well what's up whether Cowen says anything or not?

Things are going to be hard either way but if Ireland defaults it can come back.  Iceland has.  And it won't be IMFistan or Ollierehnistan or Trichetistan.  It'll be Ireland.

Wed, 02/02/2011 - 17:44 | 928785 THE DORK OF CORK
THE DORK OF CORK's picture

No - we are too globalised , they know we cannot go back to the farm , we are no longer independent creatures.

That Andrew Jackson guy spoke chiefly to a agrarian people who could feed themselves without money - the ECB know we are captured PIGS and we are now fat enough to be slaughtered.

Wed, 02/02/2011 - 20:40 | 929377 beastie
beastie's picture

I would prefer he commit ritual suicide publicly but that ain't going to happen either.

Wed, 02/02/2011 - 17:12 | 928618 Zero Govt
Zero Govt's picture

Don't you love it... the international Goon Squad pour money into Irish banks one end and the crafty Irish depositors slowly pull it all out the ATM's.

...the end-game is going to be the Goon Squad of IMF, ECB and Euro Govts holding the Irish bankers and Govt by the balls with no Irish depositors (ie. Irish banks with no customers = an empty shell company). All the goons are going to be looking at each other wondering how they bill Irish taxpayers when the banks are empty shells. 

Keep going you Irish, you're going to win this 'shell game' with a stupendously funny ending Mwhaha ;))))

Wed, 02/02/2011 - 17:10 | 928644 dirtydroog
dirtydroog's picture

They're putting their money under their mattresses, and into Rabobank.

Wed, 02/02/2011 - 17:16 | 928662 Marina Sorciere
Marina Sorciere's picture

Just another back door gov. bailout.

 This time printing 51 bil. euros as 81 billion or so  have been pulled out & offshored in 2010...looks like the Irish Central bank is 30 billion behind and counting - better fire up the presses and "notify" Brussels.


Wonder at what point Trichet & Cies. lose their taste for this. Thus far these are SMALL amounts but as a sane man would note, a transfusion of fresh blood is wasted on a corpse.

It's amazing that the present-day economic model features debasement of currency along with drowning debt bubbles with more debt. By all means, prop up the zombie banks.


Ireland, where the population were once known for their balls. Will they grow a pair before this month's out?


Winner = IMF, Brits and likely a few German and French entities - all SHORT TERM.


Loser = emasculated Irish.


Wed, 02/02/2011 - 17:26 | 928705 Jack Sheet
Jack Sheet's picture

"AN unprecedented €40bn of deposits was withdrawn from Irish banks in December, dwarfing the flight in deposits earlier in 2010"

Unfortunately the article does not state who the (former) depositors are. Locals like Joe Guinness and Betty Potato? Irish companies ? International Corporations ?... I would have thought that would be important for the analysis.

Wed, 02/02/2011 - 18:51 | 929043 snowball777
snowball777's picture

The article stated that ~80% of the depositors (possibly now former) were foreign.

Is your avatar Jack Lambert from the Steelers when he still had teeth?

Wed, 02/02/2011 - 17:57 | 928845 sudzee
sudzee's picture

Add leverage to the equation and things get really ugly fast.

Wed, 02/02/2011 - 18:53 | 929052 robertocarlos
robertocarlos's picture

Maybe the Irish people have plenty of gold and silver stashed away?  

Wed, 02/02/2011 - 19:36 | 929176 Browncoat79
Browncoat79's picture

I know I'm adding to my PM collection.....

Wed, 02/02/2011 - 20:14 | 929283 THE DORK OF CORK
THE DORK OF CORK's picture

Maybe M.B.drapier can clear this up - but I don't believe the Irish Central bank adding credits are really debt or money creation in the real economy.

The banks need to be officially capitalized at a new 12% level.

If the money leaves these new holes need to be filled electronically but the depositors do not hold the money - the Irish Central bank has these on its accounts.

Eventually these banks can be wound down with whatever deposits remain - the question is will they allow these remaining deposits become money such as cash which the ECB is liable for or are they liabilties to the loan book.

The state through the central bank is I believe on the hook for the liabilties but how could this be inflationary unless the ECB takes these liabilties on. - this is all very confusing.

Can we get someone who understands money mechanics especially in the strange multiple central bank environment that is the Euro.

M.B.Drapier where are you.


Wed, 02/02/2011 - 21:41 | 929539 THE DORK OF CORK
THE DORK OF CORK's picture

At the moment there is no liability to this electronic printing - it seems it is just a asset or pure money if you get me.

This is fucking great - as multinationals take currency out of the Irish system we have no liabilties and create something close to real money that is not double entried.

I could be wrong here , feel free to punch holes in my fuzzy thinking


Wed, 02/02/2011 - 22:07 | 929615 savagegoose
savagegoose's picture

so where can an irishman go to buy bullion

Thu, 02/03/2011 - 08:50 | 930407 Zero Govt
Zero Govt's picture

go to the Czech Republic who are doing a roaring trade in 'Precious Metals Tourism' from Greece because the country does not have any legal requirement to keep personal records or transactions of your PM buying. 

Wed, 02/02/2011 - 23:32 | 929848 Buck Johnson
Buck Johnson's picture

They forgot to mention that Ireland printed up German Euros.

Thu, 02/03/2011 - 00:54 | 930070 Buzz Wired
Buzz Wired's picture

The math on the total withdrawal from the Irish banks if applied at the same magnitude in the US would be;

110,000,000 Euros X
100 (the US has ~100 times as many people) X
1.38 (the current Euro to US$ exchange rate) =

$15.18 Trillion

Thu, 02/03/2011 - 05:34 | 930298 Jack Sheet
Jack Sheet's picture

....not from Pittsburgh, someone from the original Monty Python crew.

Thanks for the info. I thought it would be difficult to withdraw that amount from ATMs.

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