Article ID Journal Published Year Pages File Type
5088245 Journal of Banking & Finance 2016 33 Pages PDF
Abstract
This paper examines the costs and benefits of the EU/IMF rescue package for Ireland, on November 29, 2010. We analyze the costs of the intervention and the subsequent increase in value of debt and/or equity issued by Irish banks, the Irish government, and European banks with substantial holdings of Irish debt. The total initial value increase around the announcement amounts to €5.59bln at a realized taxpayers' cost of €4.23bln. While the value increase depends on somewhat generous assumptions, it further increases by €2.8bln up to Ireland's exit in December 2013. About €3.1bln of the value created indirectly supports the European banking sector, indicating that substantial benefits arise from systemic risk containment.
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
Authors
,