Irish governor backs domestic and export banking separation

patrick-honohan

The Central Bank of Ireland governor, Patrick Honohan, today warned that small countries with large banking sectors may have to limit the size of banks' balance sheets in order to protect the local economy.

Honohan, speaking at the Central Bank of Iceland in Reykjavik, said large banking sectors with access to foreign finance "had the capacity to rapidly destabilise" their local economies – citing the examples of Ireland, Iceland and Cyprus.

Consequently, he said, it would help to separate

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