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Republic was railroaded into rescue of banks: report

By Ed Carty

Published 28/01/2016

Sinn Fein TD Pearse Doherty
Sinn Fein TD Pearse Doherty

The Republic was railroaded into saving its bust banks from 2008 to 2010 as European chiefs put the then government under undue pressure to accept a multi-billion rescue loan and ordered all debts to be repaid, a major parliamentary inquiry in the Republic has found.

After 18 months of work and 413 hours of hearings, the cross-party report said there had been an almost universal acceptance until 2008 that the property and lending bubble would end with a "soft landing". The Oireachtas banking inquiry said this theory was never substantially tested or challenged and was a key failing for government, the Central Bank and the Department of Finance.

The 400-page report called it a "fatally-flawed theory".

It went on to describe the infamous September 2008 "night of the guarantee", when the six main banks made a deal with the Government to secure €440bn (£335bn) worth of deposits as a "thing of myth".

The inquiry found the idea was not dreamed up on one night but had been considered as early as January of that year and the "decision-makers" on the night were basing their plan on inaccurate information about the health of the banks.

The lack of an independent, in-depth, deep-dive investigation of the state of the banks before that night was also criticised. The committee, which has published a majority report after Sinn Fein's Pearse Doherty and Socialist Party TD Joe Higgins refused to give their support to the findings and recommendations, said the 2010 multi-billion international bailout loan package was inevitable.

Belfast Telegraph

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