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Foreign deposits on the increase amid 'good news' for Irish banks

The growth in deposits from people overseas has been hailed by the government as a vote of confidence in our lenders.

Image: Images_of_Money via Flickr

IRISH BANKS HAVE seen an increase in the quantity of money deposited by people overseas, in what is being seen as a vote of confidence in our banking system.

Financial institutions saw deposits from other euro-area residents grow by €217million in August, with an additional €179million from investors elsewhere in the world. The increase form part of a trend which has seen overseas deposits generally on the increase since March of this year, though there was a dip in June.

The results have been hailed as “good news” for the Irish banking system by the government. A spokesperson for the Department of Finance told TheJournal.ie the figures reflected international endorsement of the government’s banking policy, and a growing confidence in the ability of Irish banks to weather the recession.

The spokesperson said: “The increase is a result of the government’s restructuring of the banking system, which has made the Irish banks more attractive to depositors and investors alike.”

However, overseas money held in our banks is still down year-on-year, with euro-area deposits 11.8 per cent lower than they were last August, Central Bank figures show. Private sector deposits from the rest of the world fell even more sharply, by 24.8 per cent.

At the end of August, Irish banks held €29billion in private deposits from other Eurozone countries, and €45.1billion from elsewhere in the world.

The news comes as interest rates on Irish ten-year bonds fell further to 7.6 per cent, down from highs of more than 14 per cent in July. Financial firm Glas Securities told the Irish Times the drop was “incredible”.

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Michael Freeman

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