In order to give the markets time to digest the end of September statement on banking and the four year budgetary plan, the National Treasury Management Agency decided not to proceed with the planned bond auctions for October and November and has stated it will return to the bond markets in early 2011. The NTMA has achieved the target of raising €20 billion from the bond markets in 2010 and allowing for cash balances, retail debt and long-term funding carried over from last year, the Exchequer is fully funded well into the first half of 2011. This is an important point that is sometimes overlooked when people comment on Ireland's funding position.
The NTMA has advised that the European Central Bank does not participate in the NTMA's auctions and in fact the ECB does not purchase debt directly from governments but does so only, and on a limited basis, in secondary markets. There has been speculation recently about the scale of the ECB's purchases of Irish Government bonds under the emergency measures introduced in early May to stem the euro area debt crisis.
However, to put the ECB's involvement in context, the NTMA advises that while total turnover in Irish Government bonds since July has been over €50 billion; total ECB buying across all euro sovereign bonds in this period has been just €3.7 billion or so. That is an important statistic which bears repetition. The total turnover in Irish Government bonds since July has been €50 billion and the total ECB purchasing across all euro sovereign bonds has been approximately €3.7 billion. The ECB does not disclose details of the breakdown of its holdings of sovereign debt.
Irish Government bonds are bought and actively traded in the secondary markets by a broad range of investors, both domestic and international, but primarily by financial institutions including fund managers, banks, insurance companies and pension funds, as well as supranationals and central banks. Due to the nature of the international bond markets, it is not possible to classify bond holdings to the level of individual financial institutions. In addition, any such information would be considered commercially sensitive.
However, the NTMA has advised, based on figures published by the Central Bank for the period to the end of September, that it is estimated that about 84% of Ireland's bonds are held by international investors. Therefore, the question of discussions with representatives of the ECB in the circumstances outlined by the Deputy does not arise and has not arisen.