- IMF visit will want to provide reassurance to investors and depositers in the banks
- IMF provides loans not bailouts
- If it’s agreed, IMF will give us a loan
- Believes an IMF loan will be made available and drawn down as necessary
- IMF/ECB/EU would not send teams if they didn’t think they could agree a package
- Expects loan from Europe and IMF will be large
- Loan will run into 10’s of billions of euros
- With market uncertainty high, desireable that banks have more capital available
- There have been substantial outflows of funds from Irish banking secotr since April
- Outflow of corporate deposits has been replaced by funding from ECB
- There has been steady drain of deposits, but the banks have facilities to deal with it
- Ireland will be discussed at ECB governing council meeting
- Interest rate of EFSF is expected to be broadly around usual IMF rate
- Upto government to decide on accepting an IMF/EU loan
- Believes IMF will not find much to disagree with on governments’ fiscal plans
Elsewhere, Irish/German 10-year govt bond yield spread has tightened to 565 bps, 12 bps narrower on day.
