The total outstanding amount of bank debt, which includes bonds issued by banks, stood at €84.4 billion at the end of 2012, according to figures published by the Central Bank yesterday.

Private debt of the banking sector has been falling rapidly. Three years ago, the outstanding amount stood at €180 billion.

A surge in debt issuance by banks from about 2003 fuelled the property bubble. Once it burst, banks could no longer issue fresh debt. However, as most debt was guaranteed by the State, it was paid off as it fell due.

The outstanding amount of long-term Government debt held by private investors stood at €88 billion at end-December 2012. This represented a year-on-year increase of 3 per cent.