Tuesday, January 22, 2013

Reader service

Wall Street Journal editorial sympathetic to Ireland's bailout concession needs --

But there are strong reasons why Ireland deserves a carve-out if the bank bailout fund doesn't end up authorized to address pre-existing problems like Ireland's. In Ireland's case, unlike Spain's, the primary beneficiaries of bank rescue funds weren't local creditors and depositors. Many of them were themselves privately owned financial institutions elsewhere in the EU. At the end of the third quarter of 2010, not long before Dublin requested a bailout, German banks had $208.3 billion in total exposure to Ireland, according to data from the Bank for International Settlements. That includes $57.8 billion in exposure to Irish banks, an amount exceeding British and French banks' exposure to Irish lenders combined.

That German exposure number is one of those statistical bad pennies -- it keeps turning up. Here's the original source (give or take 3 billion), and the need for skepticism since it includes German banks operating in Dublin's financial center is noted here.

On the other hand, the orders of magnitude in this Daily Telegraph article -- on the extent to which Ireland has already been bailed out by British taxpayers due to the money put into RBS and HBOS -- look about right.