Ireland was particularly vulnerable when the global financial crisis struck. The level of vulnerability was largely due to the low interest rates, the pro-cyclical fiscal policy, excessive borrowing by banks from the international debt market, light regulation and the government tax policies.
Key learning objectives:
Explain the impact of Ireland’s monetary policy and single currency on putting Ireland into a vulnerable position before the crisis
Describe the level of regulation on Irish banks
Explain how Ireland’s fiscal policy impacted its position pre-crisis and whether the vulnerability was perceived at the time