The Financial Sector in Ireland's National Accounts 2018

Get the data: StatBank (IFI03)

Figure 2.1 shows the development of assets of the Central Bank sector (S.121) by instrument. The Central Bank has seen a significant decrease in currency and deposits (AF.2), from €183bn in 2010 to €24.5bn in 2018 and a large increase in debt securities (AF.3) from 2013 onwards. In 2013 the conversion of assets from currency and deposits (AF.2) to debt securities (AF.3) is a result of securities acquired by the Central Bank following the liquidation of the Irish Bank Resolution Corporation (IBRC). In 2018, debt securities, at €71.2bn, accounted for 73% of the total financial assets of the Central Bank.

Overall total assets have decreased from a peak value of €202.3bn in 2010 to €97.0bn in 2018. The assets of the Central Bank increased from €124.7bn in 2009 to €202.3bn in 2010 mainly as a result of the increased emergency liquidity assistance (ELA) provided to the Irish banking system. 

Get the data: StatBank (IFI03)

Figure 2.2 shows that currency and deposits (AF.2) comprise the majority of liabilities of the Central Bank, accounting for 84% of total liabilities in 2018.

Source publication: Central Bank of Ireland Annual Reports

Figure 2.3 shows that overall the amount of expenses and income related to interest decreased over the period. Both interest receivable and interest payable peaked in 2011 due to the financial crisis which led to high expenses linked to deposits.

The amount of income from interest rose in 2011 to €3.7bn. The amount then steadily decreased for the rest of the time period, falling to €1.1bn in 2018. This can be linked to the €1.6 billion provided in 2011 through Emergency Liquidity Assistance (ELA) as support for insolvent banks following the expiration of the original government bank guarantee. See: Central Bank of Ireland Annual Report 2011 (page 105) for further information.

Source publication: Central Bank of Ireland Annual Reports

Figure 2.4 shows that Central Bank profit grew throughout the time period. The difference between profit before unrealised gains and surplus income can be explained by transfers to reserves and the pension scheme.

From 2009 to 2013, the main drivers of Central Bank profit levels were interest income and expenses, whereas from 2014 to 2018 profit was mainly comprised of interest income and net results of financial operations and write-downs.

In 2014, surplus income rose further driven by the net realised price gains on securities. This reflected the realised gains on the partial sales of the 5.4% Irish Government Bond 2025 and the 2038 Floating Rate Note (FRN). The net result of financial operations write-downs and risk provisioning increased to €2.0bn in 2018.

Get the data: Central Bank of Ireland

The total external reserves of the Central Bank remained relatively stable from 2009 to 2014, fluctuating around €1.4bn during these years. From 2014, external reserves grew at a much faster rate, reaching €4.6bn by 2018, more than three times the 2014 value.

In 2009, the special drawing rights (SDRs) of the Central Bank grew to €0.8bn, from €0.1bn in 2008. This increase was due to a higher allocation of SDRs to provide liquidity to the global economic system and supplement IMF member country’s official reserves after the financial crisis in 2008.

In 2016 the reserve position in the IMF increased by €0.7bn, due to higher membership subscription in comparison to the other years. Foreign exchange figures rose consistently from 2014 to 2018, driving much of the overall increase in total Central Bank external reserves during this period. In 2018 foreign exchange comprised more than 55% of the external reserves of the Central Bank.

Source publication: Central Bank of Ireland Annual Reports

Full Time Equivalent (FTE) staff numbers grew from 2009 to 2012, before levelling off until 2014. Staff numbers increased again between 2015 and 2018, by 411 FTE, resulting in a total staff numbers of 1,927 FTE in 2018.

Source Publication: Central Bank of Ireland Annual Reports

Overall the number of issued banknotes decreased by 41% over the period from 412 million in 2009 to 242 million in 2018.

While the number of issued banknotes declined rather constantly from 2009 to 2018 the number of issued coins was more volatile, showing a less consistent downward trend.

Issuance of banknotes and coins is driven by demand, therefore this downward trend is possibly related to the development of electronic payments, better technology and digitalisation.