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The ECB is prepared for next Thursday’s Irish banking stress tests to go terribly, and has set aside more than €60 billion ($84 billion) in support, according to The Irish Times.The plan would supply “medium term” capital to Irish banks, essentially liquidity support, so they can get through what will be a time of great demand immediately following the results of the tests. It will replace older forms of support that were shorter in duration, and was requested by Ireland’s new Taoiseach Enda Kenny.
The big difference between this plan, and the older version, according to the Irish Times, is that it will be under the exclusive control of the ECB, rather than the Central Bank of Ireland. This means that the ECB can pull the plug at anytime if Ireland is not living up to its side of the EU-IMF bailout deal.