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Recalling the Celtic Tiger

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Edited By Eamon Maher, Eugene O'Brien and Brian Lucey

This book looks at various effects, symptoms and consequences of the period in Irish culture known as the Celtic Tiger. It will trace the critical pathway from boom to bust – and up to the current beginnings of a similar, smaller boom – through events, personalities and products. The short entries offer a sense of the lived experience of this seismic period in contemporary Irish society.

While clearly not all aspects of the period could realistically be covered, the book does contain essential information about the central actors, events, themes, and economic trends, which are discussed in a readable and accessible manner. Each entry is linked to the overall Celtic Tiger phenomenon and its immediate aftermath.

The book also provides a comprehensive account of what happened in this period and will be a factual resource for anyone anxious to discover information on the areas most commonly connected to it. All entries are written by experts in the area. The contributors include broadcasters, economists, cultural theorists, sociologists, literary critics, journalists, politicians and writers, each of whom brings particular insights to some aspect of the Celtic Tiger.

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Bank Solvency Crisis (Frances Coppola)

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Frances Coppola

Bank Solvency Crisis

Nowhere did the Celtic Tiger roar louder than in Irish banks. During the booming 2000s, supported by rapidly rising property prices, strong demand for mortgages and an increasingly dominant construction sector, the collective asset base of Ireland’s six biggest lenders expanded massively, along with their profits and their market capitalisation. The share prices of the two largest banks, Allied Irish and Bank of Ireland, hit historic highs in February 2007.

However, there was trouble ahead. By the end of 2006, house prices had already peaked, but both mortgage lending and construction continued to boom, helped by increasingly risky bank lending. By mid-2007, the IMF was sufficiently concerned about Irish banks’ exposure to property lending to warn about the possible economic effects of a sudden fall in house prices. In its Article IV consultation with Irish authorities, it said: ‘the end of rapid house price appreciation could trigger a reassessment of the risks associated with mortgage lending, possibly leading to a tightening of lending standards, which in turn could affect domestic demand. Cross-country, historical evidence presented in the April 2003 WEO suggests that sharp increases in house prices are followed by sharp declines about 40% of the time’. However, the IMF reassuringly said that banks had ‘big cushions’ of capital and liquidity which should see them through a property market downturn. ‘Even in an extreme scenario, involving a sharp rise in unemployment and a sharp decline in house prices, capital...

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