Irish banks borrowed overnight wholesale to fund thirty-year mortgages before the crash

Evidence

To fund lending on such a massive scale, Irish banks increasingly turned to wholesale funding markets in the United States (the repo markets we learned about in chapter 2), essentially borrowing overnight to fund thirty-year mortgages. The three main Irish banks’ combined asset footprint at the time of the crash was around 400 percent of GDP. — Mark Blyth, Austerity, 183

Categorization

• XREF: Ties to the repo-market mechanism introduced in chapter 2 and to broader shadow-banking literature (e.g., ‘This Time Is Different’).