Sovereign Debt

Dáil Éireann Debate, Tuesday - 12 June 2018

Tuesday, 12 June 2018

Questions (205)

Michael McGrath

Question:

205. Deputy Michael McGrath asked the Minister for Finance the effect the political issues in Italy have had on Irish sovereign bond yields; if a risk analysis has been undertaken by his Department on financial issues arising from the political environment in Italy; the way in which Ireland is exposed to a potential financial crisis in Italy; if this has been discussed at the recent Economic and Financial Affairs Council meeting; the decisions that were made to mitigate the risks of the situation in Italy; and if he will make a statement on the matter. [24543/18]

Written answers

Minister for Finance

My Department is monitoring developments in Italy.

Irish government bonds have performed steadily in the face of recent market turbulence triggered by the political situation in Italy. The yield on the ten year benchmark Irish government bond has fluctuated in a relatively narrow range around the one per cent mark since early May.

The NTMA has already issued over €11 billion of benchmark bonds this year; this is seventy per cent of the mid-point of the €14 billion to €18 billion target issuance range. There is no bond auction scheduled this month. The NTMA will announce its Quarter 3 auction schedule on 2 July.

The Irish financial system's exposure to Italy is relatively limited. Consolidated banking data show that domestic banks' (AIB, BOI, and PTSB) total foreign claims on Italy was 1.4 per cent of their own total foreign claims in quarter 4 2017, or 0.5 per cent of their total assets.

The Economic and Financial Affairs Council is updated on appropriate developments in the economic and financial spheres when it convenes. This matter did not feature as an agenda item at the May Council.