Dr Sheila Killian is head of the Department of Accounting and Finance at the University of Limerick and lead researcher on the debt audit project. The results of the audit, commissioned by AfRI, the Debt and Development Coalition and UNITE, were released yesterday.
An Audit of Irish Debt is the result of 5 months of research from my colleagues Frances Shaw and John Garvey and myself, which has been an interesting journey that we hope has led to a useful picture of the current situation. The banking crisis and the decision in September 2008 to support all of the Irish banks has brought our debt far beyond sustainable levels. Through the Celtic Tiger years, our total long-term bonds increased, but remained comfortably below 40billion. Now they stand at over 90billion, or roughly twenty thousand euro for every woman, man and child in the country. We can add to this our contingent liabilities: the debts of the banks that we have guaranteed, the NAMA bonds, promissory notes, emergency overnight lending and guaranteed deposits. These potential liabilities come to 279bn euro, over three times the already inflated total for government bonds.
The Audit report spells out in clear language where these different categories of debt have come from, how they are inter-related, and discussed the nature of the anonymity that surrounds the names of bondholders. We also discuss other market activities which impact on the risk of Irish debt, such as Credit Default Swaps and short selling. We are grateful for the support of Afri, Unite and the Debt and Development Coalition, and we hope that the report is useful to all concerned people who want to learn more, and forms a foundation for future work in the area.
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