Irish Borrowing costs ridiculous

Central Bank governor Patrick Honohan has described Irish bond market spreads as a “setback”.

Irish bonds spreads widened after the European Commission approved the Government’s move to raise the level of capital it can inject into Anglo Irish Bank.

“The spreads are a setback for our hopes of a narrowing to reflect the fiscal credibility of the country,” Mr Honohan told the Daily Telegraph.

“I don’t look at them every day but at this level they are ridiculous.”

Bond spreads yesterday hit the highest level in a month, reaching almost 300 basis points at one point, and the yield on Irish 10-year bonds broke through the 5.4 per cent mark, while German 10-year bund yields fell to a record low.

They closed just below 289 basis points, and this morning were at 288 basis points.

Mr Honohan also criticised Anglo in his interview, describing the bank as “egregious, in a league of their own”.

Irish Times

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