asked the Minister for Finance if he will indicate the sources from which the commercial banks increased their gross holdings of sterling assets by £20.5 millions in the past four and a half months—from £209.6 millions on 30th June, 1956, to £230.1 millions in November, 1956.
Ceisteanna—Questions. Oral Answers. - Commercial Banks' Sterling Assets.
The increase of £20.5 million in the gross external assets of the commercial banks between 30 June, 1956 and 20th November, 1956, is accounted for as to £6.6 million by an increase in deposits and other liabilities incurred outside the State. The remainder of the increase in external assets represents increased liabilities to Irish depositors. It is due, as to a total of £8.9 million, to the realisation of sterling securities by the Central Bank and Departmental Funds and, as to the balance, to the seasonal inflow of earnings from tourism and to the improved trading position resulting from the measures taken by the Government earlier this year.
I might add that the improvement in the banks' position since June does not mean that the economy as a whole is building up external assets. For the calendar year 1956 there will be a substantial deficit in the balance of payments, involving an equivalent reduction in the country's external reserves.