The Deputy refers to changes in the outstanding amounts of credit advanced to Irish households by credit institutions resident in the State, as published in the Central Bank’s Money and Banking Statistics.
I have been informed by the Central Bank that the developments in this series in 2009 and 2011 noted by the Deputy do not reflect issues related to Bank of Scotland (Ireland), but rather the derecognition of securitised loans from the statistical balance sheet of other credit institutions in the State. The developments noted in 2010 do reflect, inter alia, the closure of Bank of Scotland (Ireland) and the transfer of outstanding loans to its parent in the UK.
All issues highlighted by the Deputy refer to changes in outstanding amounts on the statistical balance sheet of credit institutions in the State, and by themselves do not reflect wholly household deleveraging. These changes can result from a number of factors, such as securitisation or other loan transfers, reclassification, valuation effects, and the underlying business transactions of loan draw-downs and repayments.
The Central Bank provides transactions data in Money and Banking Statistics to determine the underlying change in credit due to draw-downs and repayments and considers that these developments more comprehensively reflective of deleveraging. For the months mentioned in the question, loans to households from Irish resident credit institutions decreased by a net €169 million, €725 million and €612 million respectively, based on repayments exceeding draw-downs. These data are presented from the perspective of the credit institutions balance sheet.
I am advised that the Central Bank considers that deleveraging by the household can be better analysed in its publication Quarterly Financial Accounts. This series shows that Irish households have reduced their loan liabilities by €20.6bn from 2009 Q4 to 2012 Q2.
