IMF Funding Report, and the 3% Target

later12

Well we all know what's in it by now, but here it is officially, the IMF Staff Report on the extended Irish sovereign financing facility, to the tune of €22.5 billion. We are formally approved for funding.

http://www.imf.org/external/pubs/ft/scr/2010/cr10366.pdf (PDF)

So draw the curtains, crack open the last bottle of Bordeaux, put your feet up on the wicker chair in the conservatory, turn up the Verdi on the home theatre system... and soak it all in.

Or if you're in a rather more sober mood and don't really feel like doing any of that here are the main points from RTE

http://www.rte.ie/news/2010/1217/imf-business.html

Most interesting is the admission that Ireland will probably miss the deadline on the 3% target, though as always with Ajai (may I call him Ajai? I feel I know him better now) it's the things he didn't say that which said it all.

zig

later10 wrote: »

Or if you're in a rather more sober mood and don't really feel like doing any of that here are the main points from RTE

http://www.rte.ie/news/2010/1217/imf-business.html

Most interesting is the admission that Ireland will probably miss the deadline on the 3% target,

He said that, given the IMF's forecasts, reaching the 3% target in 2015 would require additional measures in the medium term.

The IMF report says the banking sector is 'at the heart' of the intense pressures facing the country.
It also shows that the IMF's forecast for economic growth next year is not as optimistic as the Government's 1.75%. The IMF thinks the economy will grow by just 1%, while the report says the Irish authorities are also slightly more optimistic about growth in the following years.

:eek:I dont think any of us were expecting that.

later12

Thread title changed to incorporate 3% target.

I think they are just being realistic to be honest, I really think the sooner we own up to our target, and the sooner we admit to the world where we are, by writing down aggressively and fundamentally NAMA asset values, as well as other estate values, and be stringent in stress testing of the banks, the sooner we will be able to realise the 3% target.

Unless investors know where rock bottom is, they will not invest.

Nobody wants to catch a falling knife.

Scofflaw

Bah - they've been reading my posts:

4. By restoring financial stability to Ireland, the contagion threat to other countries would be contained. The contagion threat from Ireland is significant. This risk arises principally because of the market’s perception that Ireland’s vulnerabilities are similar to those of other euro area peripheral economies. In contrast, the direct exposure of international banks to the Irish banking sector is much less salient than is sometimes inferred from the often-cited Bank of International Settlement statistics, which report aggregates that include Ireland’s sizeable international financial services (IFSC) industry. The largely self-contained IFSC has limited links to domestic banks and has not been a source of instability. The international exposure to domestic banks, particularly those covered by the Irish government’s guarantee, is, according to the Central Bank, a small fraction of the aggregate numbers.

The contagion risk nevertheless is significant since banks across the periphery are perceived to face common vulnerabilities. Stress in the domestic banks also tends to weaken the sovereign’s credit. The evidence is that the Irish sovereign and banks’ weaknesses have been transmitted to other peripheral economies (Box 1). Looking ahead, the risk is that under high stress conditions, spillover effects to other peripheral euro area economies could be large and extend beyond the euro area. Also, while the Irish correlations with the U.K. and U.S. markets have not been notable recently, a disorderly eruption of financial pressures in Ireland could have wider implications through connections to those markets.

cordially,
Scofflaw

later12

Is that you Ajai?