Ireland's Economic Crisis and Recovery

In: Business and Management

Submitted By brightladylily
Words 2160
Pages 9
Assignment Title: Understanding Ireland’s Economic Crisis and Recovery
Words Count: 1500 words (Excluding references)

Introduction

In 2008 Ireland plunged into one of its most severe economic crisis recorded since pre-war times.
This paper looks at the monetary policies and conditions during Ireland’s recessionary years and in conjunction the key features and policies that were introduced by monetary authorities in order to restore financial stability in Ireland. This includes looking at policies such as the recapitalisation of banks and blanket guarantee in order to stabilize the banking system. Following this an insight into Ireland’s people and the banking systems combined. This deals with restructuring loans given to households and companies. A huge emphasis was placed on mortgages given to households during the boom times.

Prevailing monetary conditions and policy context for the Irish Economic Crisis
When Ireland was announced “in recession” back in 2008 numerous monetary conditions and policies were to blame. Ireland had issues with its banking systems. Its banks needed urgent and constant capital injection to the point the government alone could no longer support them. This soon highlighted that there were clearly further solvency issues underlying.
The cause of the recession was blamed on the ever expanding property market to its bust point. This played a significant factor but was not the main reason for the recession as was soon discovered. This was linked to the construction industry which had seen some outstanding performance during boom times. On the collapse of the property bubble the construction industry suffered leading to high unemployment and declining growth rates.
Mortgage and lending was an issue that sparked recession. This involved banks giving loans over and…...

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