NTMA spends €37bn mopping up legacy of notorious IBRC (Anglo Irish Bank) promissory notes
The 2013 restructuring saw IBRC being put into liquidation and the then minister for finance, Michael Noonan, swap the prom notes for €25 billion of government bonds with the Central Bank.
Germany’s Bundesbank president at the time, Jens Weidmann, was known to be particularly unhappy about the deal and the potential precedent it would set. Draghi, meanwhile, would tell Irish MEP Luke Ming Flanagan in a letter in June 2015 that “only by fully and expeditiously disposing of these assets can the monetary financing concerns be fully dispelled”.
However, the NTMA has had to pay up to buy the bonds. That’s because their value rose sharply in the second half of the last decade as euro-zone borrowing costs plunged, as memories of the financial crisis faded and the ECB spent about €5 trillion buying bonds under extraordinary stimulus programmes. Bond values rise as market interest rates, or yields, decline.
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