Bank bail outs lead to a further downgrade of Irish Debt

The cost of Irish Government borrowing increased once more yesterday after Standard & Poor (S&P) downgraded Irish debt from AA to AA-. The difference between German yield and Irish yield rose 24 basis points, reaching 344 basis points. Accordingly, Irish bank bond credit default swap (CDS) also rose. Anglo Irish Bank increased by 13 points to 581 and Bank of Ireland was up by 10 points to 358.

Mr. Constantine Gurdgiev stated 'the downgrade was mainly motivated by the fact that the cost of the Irish banking bailout has increased significantly over previous expectations. S&P now estimate the cost of recapitalising the Irish financial system at €45-50bn, up from €30-35bn.'

For further information you can visit Mr. Constantine Gurdgiev blog,o True Ecnomics.