Financial regulator steps up contact with banks (The Irish Times)
The Irish Financial Services Regulatory Authority and the banks have been in almost daily telephone contact in recent weeks to assess liquidity levels as the credit crunch has intensified.
The Financial Regulator has been in a heightened state of alert since September because of the lack of liquidity in the capital markets and the high cost of interbank borrowing in the wholesale funding market.
The regulator increased its vigilance of the Irish banking sector in September in the early stages of the credit crunch by seeking weekly instead of quarterly liquidity reports on the ability of the Irish banks to meet their outgoings. In recent weeks it has been in much more frequent contact with banks, seeking general information and often daily updates on the availability and cost of funding in the international money markets.
A spokesman for the regulator said the increased level of contact was "not as significant" as the change in the frequency of liquidity reporting. "We are just in more deeper and general contact as part of a heightened state of alert," he said.
A senior banker said financial institutions had also been contacting the regulator with information. He said the regulator was "keeping a close eye" on developments in the money markets. "They have heightened vigilance - it is what they should be doing. They are making sure they have got a flow of information from the internal market and they are feeding into the ECB [ European Central Bank]."