"In relation to the discussion around the TED spread and Libor rates yesterday [Ed. Wednesday] I might add the following: Leading up to the credit crisis banks in many regions, and none more so than in Ireland, increased their dependence on the interbank markets for funding. A move to rebalance their funding back towards more reliable customer deposits is forcing them to pay up for those deposits, aside from any lingering pressures for funding in the wholesale markets. In essence, the banking markets remain dysfunctional with banks having to pay well above central bank overnight rates yet they are struggling to lend out at those same rates."

Eoin Treacy's view Thank your for this informed comment which succinctly describes the travails of the banking sector.