parti: objectives and features of the new reporting system 159 - TARA

Components of Bank Credit' A similar classification of bank credit, replacing the
detailed but not very usable present classification, would have been useful More
important, perhaps, a clear distinction between private sector and State sector
borrowing is vital The increasing tendency to shunt Exchequer borrowing into the
Semi-state area (and thus to private credit) makes nonsense of the private-sector
guidelines As no-one seriously believes that DCE is likely to be anything more than
an interesting statistic to the Central Bank and the Department of Finance, 'private'
c 1 edit will still be an important focus of attention
Consistency of Bank and Exchequer data: Perhaps the biggest problem arising from
an attempt to analyse Irish monetary data and integrate it into other financial data is
the lack of concordance between the composition of borrowing as announced by the
Exchequer and the composition evident from banks' balance sheets The different
treatment of the price of low coupon stock may account for some of the problem It
would be useful if some form of flow data on bank purchases could be obtained to
help make the two aggregates more consistent
Extent of Policy Intervention in Market: This paper has dealt with the new banking
statistics It has not dealt with the new policy environment In particular the use of
foreign exchange swaps and repos by the Central Bank has grown considerably
There is no information on the former except concealed in a net foreign liability
aggregate Certainly there is no information on the scale of activity in repos between
banking return dates Even when data are available - for example on bank deposits
with the Central Bank - there is a reluctance to provide information on the return on
such deposits (and on the cost of lending) This affects any meaningful analysis of
bank portfolio behaviour
In a perfect world we would have access to all statistics as they were produced That
world is some way off While I think the Central Bank could do better I acknowledge
that relative to other institutions they have done well. Mr McEvoy's paper is a
tribute to the efforts to improve statistical coverage I hope my remarks are seen as
an attempt to ensure that the Bank does not rest on its laurels Once again may I
express the Society's thanks to Mr McEvoy for his paper this evening
Louis P.F. Smith: I would like to congratulate Mr McEvoy on his paper The paper
recognises the problem of defining money and banks. However, it is not possible to
shrug off £2 billion deposited with building societies by individuals and companies
Such deposits are as liquid as those with banks and, because of lower reserve
requirements, have more impact The sum involved is larger than Mi and growing
20 per cent over many years. It seems as if the criterion adopted was administration
control by the Central Bank, since the ACC, ICC, building societies, as well as
assurance and credit unions are not adequately covered This is understandable but
inadequate in logic and merely recognises anomalies
The more effective Central Bank control of money (however defined) becomes, the
less meaningful will that definition be Other intermediaries will expand, even
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