related to the rest of the evolution of the public finances. recapitalising the banks the government has now injected sums equivalent to over 50 % of this year ’ s gnp into the irish - controlled banks. about a half of this has been a cash injection – much of it from the nprf, which had to sell the bulk of its external investments in equities and bonds, etc. to provide this – and the rest in deferred form : promissory notes and conventional government bonds provided to ibrc, the successor bank to anglo and inbs. until these deferred amounts are settled in cash, the cash needs of ibrc are being met with some €42 billion of exceptional liquidity assistance from the central bank of ireland. the drawings of the central bank on the eurosystem that, in effect, meet this ela is subject to remuneration at the ecb policy rate, currently 1 per cent. as long as these arrangements continue, then, they have a sizable impact on the gross – and especially the net – debt of the state, but the overall running cost to ireland has been relatively low, 2 thanks to the indulgence ( in this matter at any rate ) of the locally oft - maligned ecb! although this financing arrangement continues for the time being ; still, from the market ’ s point of view, the lack of any explicit commitment to long - term low cost financing of ibrc ’ s cash needs no doubt has represented one of the obstacles to ireland regaining market access on the necessary scale in the immediate future. with last night ’ s summit statement, it may not be unrealistic to hope that this important loose end can be tied - up relatively soon. less than €1½bn compared to total servicing costs of the national debt of €7½ bn in 2012. bis central bankers ’ speeches at the central bank of ireland, our initial approach to the recapitalization of irish banks back in late 2009 was to imagine putting in not just enough capital, but so much capital as to fully dispel any market concerns. the rapidly mounting actual and prospective public debt ratios coming from the non - banking deficit meant that, given the scale of the prospective losses, ( as announced in september 2010 following the painfully prolonged process of determining the first full analysis ), put paid to that idea. overcapitalising the banks under such circumstances would simply destabilise the state. that is why we were

patrick honohan : “ more europe ” in the financial arena – good for ireland? address by mr patrick honohan, governor of the central bank of ireland, at the institute for international and european affairs, dublin, 29 june 2012. * * * thanks once again to the institute for international and european affairs for arranging such an interesting event and for inviting me to speak at it. it is almost 18 months since i spoke here last, in the immediate aftermath of the bailout deal with the troika, that combination of the european commission and the imf “ in liaison with ” the ecb. the engagement with the troika has certainly generated a lot “ more europe ” in the financial affairs of ireland and i will come back to that in a few minutes, but first i want to harken back to earlier days. european bank supervision one of the two inaugural publications of the institute back in 1991, a study entitled economic and monetary union, explored the implications of the freshly minted draft maastricht treaty which laid the constitutional foundations for emu. the study goes into the question of whether bank supervision should remain at the national level in the new monetary union and concludes that “ an opportunity may be missed [ … ] arguably, a centralised bank supervision authority ( whether a department of the ecb or a separate entity ) with wide powers would be more able to operate above national political pressures in acting decisively to prevent a failing bank from continuing to operate in an unsound manner. ” “ there would [ the study astutely goes on to observe ], of course, be a need to retain a local - based inspection system for supplying the local feel which is essential for detecting the early warning signs of distress. but, so far as action to restrain unsound banking practices is concerned, here again, as in the case of monetary management, it may be worthwhile for national governments to cede power to the centre in order to ‘ save them from themselves ’ ”. well, it seems from the banking part of the 4 presidents ’ report 1 ( remarkably entitled “ towards a genuine economic and monetary union ” ) and from this morning ’ s summit statement that this two - decade old idea ’ s time has finally come. at last there is a clear push towards integrated banking supervision with ultimate authority at the european level enforcing a common rule book. of course a significant national component of supervisory activity would continue, and probably extensive cross - border use of national supervisory