Belfast Telegraph

Republic was railroaded into rescue of banks: report

By Ed Carty

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