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Back to Chapter 7: The Guarantee
The decision taken on Monday night, 29 September 2008 and the early hours of Tuesday, 30 September 2008 to recommend to the Cabinet that a blanket Guarantee should be introduced was examined in detail by the Joint Committee. Over twenty witnesses gave evidence on the basis of their involvement in different aspects of the day’s activities which culminated in that recommendation. Much of the evidence given was based on recollections. Some notes taken by people at the time of these events were made available to the Joint Committee.
The Joint Committee sought to establish what happened on the night of the Guarantee and why an incorporeal cabinet decided to guarantee all six banks.1
The following participants were in attendance at all or part of the meetings:
The following people participated from 21:30 as requested:
Standing by in Government Buildings were:
No official minutes were taken of the meeting that took place in Brian Cowen’s office in Government Buildings on the night of September 29/30. No official documents have been made available to the Joint Committee. A small number of personal unofficial contemporaneous notes were made available to the Joint Committee.
Brian Cowen, who chaired the meeting, commented on the impact of not having a note of the meeting: “I have to take responsibility, I am sorry that there isn’t an accurate, full note of that meeting. It would be the protection of all of us, if there were.”2
The meeting appears to have started sometime between 18:00 and 19:00. Dermot McCarthy recalled that: “I think I was notified that there would be such a meeting earlier in the afternoon and I arrived at it, I think, some short time before 7 p.m.”3 His expectation in joining the meeting was that: “… this would be a matter of hearing a briefing and to prepare what might be put to Government.”4
John Hurley was asked about the meeting on the night of the 29 September 2008:
“My recollection is that the preliminary meeting that I described … the first plenary meeting, there was a very broad discussion on the options and the view was that we should tease out the different options.”5 He said: “I think I went over to Government Buildings probably around 6.30 p.m.”He outlined that the first meeting: “…started with a detailed discussion on the liquidity position, on the threats facing the system, how the individual banks were.”6
Patrick Neary outlined his recollection of events:
“We advised the meeting that on the basis of the information available to the authority, all banks were in compliance with their required capital ratios, were in a position to meet their obligations on a going concern basis, but liquidity was becoming a critical issue for them, especially Anglo.”7
Brian Cowen said that:
“Mr Neary and Mr Farrell, from the regulator’s office, outlined their serious concerns. I recollect that they were of the view that something significant had to be done immediately to stabilise the situation. In that respect, they spoke of the need for introduction of a Guarantee…”8
The Joint Committee wanted to establish whether the idea of a bank guarantee had been discussed at any time before the guarantee meeting. Brendan McDonagh, had been directly involved in negotiations and conversations about the growing crisis during September. In his evidence he observed:
“The first and only reference to a blanket Guarantee throughout all the engagement in September 2008 was an email... at 1.26 p.m. on Friday 26th of September 2008… the NTMA view on, inter alia, the potential sovereign implications of a blanket bank Guarantee.”9
“there was no substantive discussion involving myself – and as far as I am aware with my senior NTMA colleagues – about a bank guarantee in the months, weeks or days leading up to 30 September...”10
Kevin Cardiff e-mailed Government advisors, Merrill Lynch, when he realised that the guarantee option was now emerging as the preferred solution.
“I noted, being aware of their views and also having emailed Merrill Lynch as soon as it became clear that a broad guarantee approach would be a key focus of discussion, that Merrills and NTMA, our advisors, would be likely to advise against the broad guarantee option, on balance.”11
Head of European Financial Institutions at Merrill Lynch, Henrietta Baldock replied to him immediately with reference to the Merrill Lynch Memorandum from the previous day, Sunday September 28. The Memorandum attached to her email reiterated that:
“It is clear that certain lowly rated monoline banking models around the world, where there is concentration on a single asset class (such as commercial property) are likely to be unviable as wholesale markets stay closed to them. This has inevitably had an impact on our conclusions and we believe it is important to act quickly to deal with these institutions to avoid a systemic issue.”
The Merrill Lynch Memorandum also asserted that State protective custody would protect depositors, senior creditors and dated subordinated debt holders (via a State guarantee) and would mean:
“equity holders and undated junior subordinated debt holders would receive nothing, providing a capital cushion of €1.4 billion in the case of Irish Nationwide and €7.5 billion in the case of Anglo. lt is important that all other creditors are reimbursed to avoid a contagion effect with the other Irish banks…”12
Brian Cowen confirmed that Brian Lenihan was involved in the discussions at this stage and “agreed with the analysis and the up to date position given by the Governor. He indicated that he [Brian Lenihan] felt part of the solution would be the nationalisation of Anglo Irish Bank.”13
Brian Cowen described how, following a discussion:
“The options were narrowing down to a nationalisation plus a Guarantee, or simply a guarantee of the system itself. The other options referred to by Merrill Lynch which had been discussed, were discounted at that stage.”14
The Joint Committee wanted to understand whether the ECB and/or its President Jean-Claude Trichet played a role at the meeting. Brian Cowen said:
“Governor Hurley had been in touch with the President of the ECB, Jean-Claude Trichet, over the weekend and confirmed to the meeting that there was no euro-wide initiative in the offing and just as other countries had to take decisions on their banks, it was clear that we were on our own, we would have to deal with this at a national level.”15
David Doyle was questioned on the ECB position. He replied:
“On the core question [whether the ECB would allow a bank failure] the view of the ECB as quoted to the meeting by the Governor on the night was that Mr Trichet had advised him that no bank failure could be allowed, or words to that effect.”16
John Hurley was asked whether the ECB knew about the potential for the Irish Government to put a guarantee in place. He replied:
“It would have been one of the options but it would have been mentioned as an option that might have to be considered. But there was no specific pre-dialogue on specific options but there would… in the context of discussions, there would have been an understanding of the broad options that would have to be considered.”17
The former President of the ECB, Jean-Claude Trichet stated in his opening address to the Joint Committee:
“… it is also important that the Guarantee was introduced by the Irish Government without any co-ordination with the ECB, or with any other European partners, and I was the witness of that, or any other international partners.”18
He was asked:
“… if you could just clarify, in the period of … prior to September 2008, were the ECB engaged in any way with the Irish Government, the Irish Central Bank or Irish financial services in any manner related to the implementation of the design or the structure of a guarantee?”
Jean-Claude Trichet replied:
“No contact between the Irish Government and either me or the ECB or to my knowledge, their governments, because I had myself the other governments calling on me and saying, “What’s happening?” …We were not kept abreast of any development in Dublin by the Irish authorities, and as regards the Guarantee, we learned of the Guarantee through the media.”19
Jean-Claude Trichet was asked if he was aware: “…that Anglo Irish Bank was virtually certain to default the next day?”20
He responded: “Again, it was not the responsibility of the ECB to survey the banks… So no memory, No, I would say, responsibility in this domain.”21
Paul Gallagher was asked if he accepted the rationale as stated by Trichet regarding the role of the ECB. He said: “The ECB is forbidden to bail out any banks and the European institutions are forbidden to do so...”22
When questioned on whether it was a fact that the banks were the “State’s responsibility”, he replied “I think that was the significance, that you shouldn’t let a bank fail, the responsibility is yours, that was something that the Government already knew.”23
The Joint Committee asked Kevin Cardiff:
“can you outline the individuals and organisations who suggested that a broad legal guarantee approach before the night of the guarantee? Who sought the views of those individuals and organisations?”
He replied:
“Okay. End of April, Sean Fitzpatrick [to] John Hurley... a few days later, maybe a week later somebody and, unfortunately, and in my notes it just says DD suggested the idea of a broad guarantee ... I’m not sure whether legal or political, quite possibly at that stage political... A lot of these approaches were to John Hurley. May ... 23 May, I think, to me. I was at a seminar at which Charlie McCreevy was speaking and he said, “Kevin, look I think you need to make some sort of broad statement.” So political... In July, there was a meeting of some sort with ... with Davy stockbrokers. I can’t remember just now who, but I probably could find it in notes, if was necessary. And they said, ‘’Look lads, probably if things get worse, you might consider a guarantee so why don’t you just do it now?”... But all of these were conversations; you wouldn’t read too much into them. These were ... of their nature, they had to be a little bit exploratory so I’m not saying that, you know, anyone was nailing their colours to a mast at any of these points.”24
When this was put to Charlie McCreevy, he said:
“I have no recollection of the meeting or the conversation. He said he attended an event at which I was presumably the guest speaker, I’m presuming it took place in Dublin. And I don’t know whether ... after the event, whether sitting around and having a cup of tea, whether I asked him ... I told him or he asked me for an opinion. But, so I’ve no recollection of what I said then. But I would have a clear view as to what I would’ve been thinking around that particular time... there was all this emphasis on Ireland, so, as Kevin said at the ... the thing, and I’d say it’s very accurate what he said, I said more or less to him “I think it’s time”, I probably said “Someone should make a broad statement about the situation”.”25
John Hurley was asked if he remembered any specific lobbying for a guarantee and said:
“No ... lobbying, I think, is ... I know what lobbying is, having been a secretary of a number of Departments. I know specifically what it is and I would have acute antennae out in relation to it. I never felt I was lobbied in relation to a guarantee but I would ... any Governor or any secretary of a Department would have had numerous contacts during this particular period, and any time I was contacted, and there was something significant, I would have told the Minister.”26
Kevin Cardiff said in his written statement that he “emailed Merrill Lynch as soon as it became clear that a broad guarantee approach would be a key focus of the discussion…”27 From the evidence the Joint Committee has seen that this email was sent at 18.37.28
William Beausang represented the Department of Finance on the DSG. He provided documents to the Joint Committee which included an email that he had received at 21.11 on the night of the meeting. According to William Beausang the email had been forwarded to him by David Doyle and it came from the Central Bank. It was “a draft Government press release”29 confirming a guarantee decision on the part of Government for the domestic banks involving a six month period:
“to guarantee the retail, wholesale deposit and inter-bank lending … of the six domestic credit institutions (i.e. Allied Irish Bank, Bank of Ireland, Anglo Irish Bank, Irish Life and Permanent, Irish Nationwide Building Society and Educational Building Society”.30
In his written statement William Beausang said that “It appears to have been authored earlier in the evening in the Central Bank in advance of the commencement of the meeting in Government Buildings.”31
The Joint Committee asked William Beausang about the draft press release:
“Ah well ... well, I don’t know why it existed. I mean, I don’t know why ... I mean, the Central Bank obviously had prepared it earlier in the day in advance of the discussions in Government Building. I suppose…”32
Because much work had been carried out on the nationalisation option, including draft legislation, he was asked if a similar draft was ready for this option. He replied “No, there wasn’t a press release for a nationalisation of any institution, no.”33
Brian Cowen was asked about the email:
“The Governor of the Central Bank was of that ... had come to that view, and made a contribution on that basis. And that may ... it may explain why people in the Central Bank were preparing a draft on that because that was their view.”34
A break in the meeting was called. Brian Cowen returned to his own office. He told the Joint Committee:
“During that break I decided to get an external view. Mr. Alan Gray, an economist and a Central Bank board member, was someone whose views I also respected. I phoned him and asked him what he thought of a guarantee option being used.”35
Alan Gray outlined the nature of his conversation with Brian Cowen:
“…the option that the Taoiseach asked my view on, was the very same option that was raised at the Central Bank board meeting the previous Thursday, which was an option to give a guarantee to the six financial institutions. And he asked me what did I think of it and what would be the market reaction.”36
Brian Cowen was asked about what Alan Gray had said to him during the phonecall:
“Mr Gray emphasised that providing a guarantee would, obviously, give an advantage to those institutions to whom the guarantee would apply vis-à-vis competitors, since they would have the backing of the Irish Government.”
“Mr. Gray also stated that if we were considering the introduction of a Guarantee of any kind, that it should be strictly time-limited.”37
Alan Gray told the Joint Committee:
“I did not give a precise timeframe but I said it should be as short as possible, and I had in mind the fact that it was probably about exactly a year previously when Northern Rock went bust that the UK Government - and, I think, very wisely - did not say, “We’ll give a guarantee for five years.” They said, “This is a temporary guarantee to deal with an exceptional period of financial turbulence.”38
In response to questions about whether he had advised Brian Cowen of the meeting with Anglo executives, Alan Gray said “I did not and I did not refer that to anybody else….. I think if I referred to that it might be misinterpreted as some way suggesting I was trying to promote their interest.”39
In his written statement Kevin Cardiff explained that he had become aware sometime after the night of the guarantee that Seán Fitzpatrick had visited:
“at least one of these two banks [AIB and BOI] that day, and had asked that the larger bank would take over Anglo. I do not recall this rather salient piece of information being passed on in the meeting with the Taoiseach.”40
Alan Gray was asked if, in that phone call, the Taoiseach had indicated to him that the Minister for Finance was favouring nationalisation. He replied: “He did not.”41
During this break, Brian Cowen and Brian Lenihan had a private discussion explained by Brian Cowen as a chance for both men to find the best solution in the crisis situation. The Joint Committee is conscious of the fact that Brian Lenihan is now deceased. Efforts were made to elicit evidence in relation to his role that night.
One potential point of conflict that was brought to the Joint Committee’s attention was whether or not the Minister for Finance was “overruled”by the Taoiseach on the night. This was in relation to the possibility of nationalising Anglo and whether or not the Minister was in some way forced to change what was stated to be his original position and support a blanket guarantee. A side-meeting did take place in the course of the evening where the two Cabinet Ministers had a private discussion.
Central Bank Governor, Patrick Honohan, raised the idea that Brian Lenihan had been overruled by Brian Cowen on the night of the guarantee. In evidence to the Joint Committee, he referred to his chapter in the book “Brian Lenihan, In Calm and in Crisis”and explained that he believed, on the basis of what Brian Lenihan had told him, that as he stated in the book “Brian argued strongly for the immediate nationalisation of both Anglo and INBS – but … he was overruled on the night.”42
When asked who was present who would have had the authority to overrule the Minister for Finance, Patrick Honohan replied “The Taoiseach and the Attorney General were present. They are the only other political people who were present on the day.”43
Brian Cowen confirmed the two men had had a private meeting and said:
“We were talking the issues through and there was no question of our conversation being in any way adversarial or confrontational with each other. Both of us were deliberating and striving to find the best course of action for the country at this point in time.”44
Cathy Herbert, who was in Government Buildings on the night of the Guarantee but not in the room, spoke with Brian Lenihan very soon after the meeting. She said that she had no recollection of him raising the issue in any discussion with her after the event. She said “it seems strange to me that he would have said he was overruled.”45 She also said:
“I think that if it had been a problem, if there had been a serious disagreement, in other words if he felt he had been overruled in… and if he was … had a complaint, I would have known. And I didn’t…he would have discussed it.”46
David Doyle also sai d: “I was never aware that there was a suggestion that the Minister was overruled.”47
Kevin Cardiff said that Brian Lenihan discussed the private meeting with him afterwards and that he told him that after he and the Taoiseach had left the room to speak privately:
“…he agreed with the Taoiseach to follow the broad guarantee approach. He did not use the word “overruled” but rather indicated that he thought it important that he and the Taoiseach presented a common political position.”48
Paul Gallagher said he had not been privy to the meeting and that Brian Lenihan had never told him that he had been overruled.49
David Doyle recalls that when Brian Cowen and Brian Lenihan returned from their meeting that a decision had been reached. He said:
“Eventually the Taoiseach came back in and said they had decided to recommend to the Cabinet a Guarantee and that Anglo was not being nationalised. I am pretty certain he said“for the moment” .”50
Brian Cowen said:
“Eventually, I put it to the table that it seemed to me that a full Guarantee option provided the best prospects of addressing the urgent liquidity problem and of sending a clear message that Ireland was standing behind the financial system – which would be understood by the markets and for a limited time… It is my recollection that I then asked everyone could we run with a guarantee – only approach in principle. There was agreement on that and further details would now have to be worked out.”51
In the evidence given by Kevin Cardiff about the meetings on the night of the Guarantee he said:
“I thought the meeting would go somewhat differently where he would say“Okay, Department of Finance or Central Bank or whatever, you start from scratch and build up” . But actually he had a view, I think from the start.”52
Kevin Cardiff also said: “In fact, the decision to give them a Guarantee was not fully made but I think it was certainly in the mind of the Taoiseach long before that evening started.”53
Brian Cowen was asked if he had made his mind up before the meeting. He replied: “I hadn’t my mind made up going into the meeting… It seemed to him [Kevin Cardiff] that I had my mind made up which I didn’t…”54
David Doyle was asked for his recollection:
“My recollection is the Taoiseach was a pretty direct character. He’d put it on the table and say“Now let’s examine this” I don’t recall like if he had come in and said, “let’s examine this. We’re not going to discuss anything else. Let’s just do it. ” I’d accept that that wouldn’t have been an appropriate position, but that’s not what he did. He put it on the table and the debate went on for about 6 or 7 hours after that.”55
At 20:57, the Central Bank emailed its ‘best’information on the banks to William Beausang. The figures from that day were most up to date for IL&P and Anglo, with the other bank figures from lunchtime that day. It was stark for all the banks.56
The two main banks, AIB and BOI had arranged to be at Government Buildings to meet the Taoiseach at 21:30 and they came into the meeting room after a break. Each bank had two representatives. The Joint Committee has no evidence to suggest that any other bank was invited to attend this meeting or that any other bank attempted to have a meeting with Government representatives that day.
The Joint Committee spent considerable effort to establish the key reason the banks had sought the meeting. Eugene Sheehy was asked by the Joint Committee why the banks had made the request to meet. He said “Because 29 September was a tumultuous day in the history of international financial services and we were a part of it.”57
In his contemporaneous record of the night,58 Eugene Sheehy explains that four separate meetings occurred between the banks and the officials and government representatives, with long gaps between each meeting. His notes indicate that he told the meeting that AIB was:
“in a reasonably strong position but it was experiencing stresses in the market but that we had adequate liquidity to meet our regulatory requirements until the end of October.”59
Eugene Sheehy’s note also said that BOI’s Brian Goggin:
“presented a similar outlook, also stressing that the situation was deteriorating and we were a number of weeks away from both banks being funding all of its requirements in the overnight market which, while a viable option was highly undesirable and fraught with risk…“60
In his contemporaneous short note of this meeting with the banks, Kevin Cardiff noted that Richard Burrows offered a view that there was a “rapidly deteriorating situation everywhere… situation threatens the stability of our organisations.”61
His note added that Eugene Sheehy had observed that “people we’ve dealing with for decades pulling back – 1 month we will be funding bank overnight. But if can’t even get that, disaster – bankruptcy.”62
In his evidence, when asked about Kevin Cardiff’s note, Eugene Sheehy said:
“No, that’s not what I said [at the time]. We were solvent. The system, in general and globally, was entering into a condition it had never been in before. We had to do something about it. That’s what we said to Government.”63
The Joint Committee sought to conclude whether the two banks AIB and BOI brought with them a prepared written proposal for a guarantee. We heard and read conflicting evidence on the matter.
Dermot Gleeson said that “an initial draft had been furnished”and “I think by Bank of Ireland”and “was in a form which we [AIB] thought was too bare”.64 His view, was that AIB “furnished a more extensive formula.”65
“my recollection is that there was a form of words written on a single sheet of paper in handwriting by either Eugene or me, I don’t know, and it would have said, you know, something like “deposits”, “bonds”, and something else. But that was what was handed over.”66
Eugene Sheehy could not confirm this from his recollection:
“I’ve racked my brain on this, Deputy, and I can’t actually remember whether there was a piece of paper or not. If there was, it must have been a very small piece of paper or it must be in the Department’s records. I can’t remember it.”67
BOI documents examined by the Joint Committee indicated that contemporaneous minutes from an internal bank meeting on 29th of September 2008 referred to “a draft guarantee being prepared”68 Brian Goggin was asked about these minutes. He said, “I have absolutely or had absolutely no recollection of a document being drafted, and for the record, there was no document...”69 The BOI Group Secretary confirmed this position to the Joint Committee.
The Joint Committee subsequently wrote to Brian Goggin, Richard Burrows, Dermot Gleeson and Eugene Sheehy to ask for further clarifications. The witnesses from Bank of Ireland confirmed their previous evidence, that there was no document.
Dermot Gleeson of AIB said:
“In my recollection, a slip of paper, upon which there were some words or formulae written (possibly in handwriting) was brought by AIB to the meeting.”70
Eugene Sheehy of AIB said:
“AIB did not bring either a draft guarantee or a suggested form of words to Government Buildings on 29 September 2008.”71
The Joint Committee never saw the document that was mentioned or any other such documents.
Kevin Cardiff said in his written statement “They [the banks] explicitly sought a very broad guarantee and provided a suggested wording.”72 He also said “They asked that Anglo be nationalised.”73 and “Yes, they did provide a draft. Only one version so far as I can recall…”74 He went on to say that to the best of his recollection “it was one document and it came from the banks. It certainly wasn’t generated by us and then handed to them.”75
Brian Cowen remembered a document but “…I don’t recall that being a very big document. It was, you know, maybe four or five lines maybe, from memory now.”76
Dermot McCarthy’s “…recollection is that there was a formula, a definition, if you like…”77 He was also of the view that it “had the support of both institutions.”78 As regard the content, he recalled it as “a definition of types of deposits and instruments which would be covered.”79
David Doyle could not recall it. He said “I don’t recall myself seeing a draft of the guarantee…”80 Pádraig Ó Ríordáin was “unaware of any draft from the banks and I don’t have a copy.”81
Paul Gallagher drew attention to the distinction between the “having sight of that document or having the document in your hand that the banks said they brought?”82 He replied “I don’t precisely remember that”.83
Brendan McDonagh had been invited to Government Buildings by Kevin Cardiff because he had become increasingly involved in advising the Department of Finance since April 2008. He arrived at around 21.30 and was asked to sit in a room adjacent to the main meeting room. He was accompanied by his colleague Oliver Whelan. Neither man was asked to join the meeting while the decision about the guarantee was being made.
“Whilst my colleague, Mr Whelan, and I were in Government buildings on the night of the 29 September, we were not, as I previously advised, made aware as to the reason why we were there… why we were required, or consulted, or otherwise asked to input prior to the Government taking the Guarantee decision.”84
Brendan McDonagh said that he recalled hearing the news, while he was waiting, that the Troubled Asset Relief Program (TARP), the US programme to purchase assets and equities from financial institutions as a rescue plan, had been rejected by the US Senate.
Alan Gray remembers the decision on TARP:
“The decision of the US Congress to reject the TARP Bailout Plan meant that while there was a chance up to then that liquidity pressures would ease, I thought when I heard the decision on the television, things had fundamentally changed. My view is that the Guarantee was the least-worst option available.”85
Kevin Cardiff also recalled when he heard about TARP:
“One such interruption, to give an example, came when Joe Lennon, one of the Taoiseach’s advisers, came in to the meeting room to break the news that in the US Congress the TARP plan – the plan that was intended to save their banking system and economy, and by the way also reduce the contagion effects for Europe –had failed to pass the Congress. It had some real implications for the process in Government Buildings. The first was that the money markets were likely to be even more unsettled the next few days, adding to the pressure for really decisive action in Ireland that night.”86
Kevin Cardiff said: “Brendan was outside because the people in the room… the senior people in the room didn’t choose to bring him in.”87
Brian Cowen was questioned by the Joint Committee on the reason why the NTMA were excluded from the meeting. He said “I wouldn’t have known who was outside the door until whoever came in the door. You know what I mean.”88
The Joint Committee raised the issue of whether there had been a decision to exclude the NTMA from the discussions.
Dermot McCarthy said: “No, I don’t believe that’s the case… The CEO and others were present at briefings with the Taoiseach in the days before the Guarantee.”He also commented on the relationship, saying:
“There was a very good relationship between Dr. Somers and Taoisigh directly and the NTMA was regarded across the system … as a very expert body and its views were both sought and respected.”89
Former Chief Executive Officer, Michael Somers and Director John Corrigan of the NTMA, were in the US on the night. Brian Cowen said: “I found it unfortunate that the main men were away, out of the country, they were doing NTMA business.”90
When pressed on whether Brendan McDonagh would have been able to speak on behalf of the NTMA Michael Somers replied “Yes, yes, I mean, I would have had full confidence in what … in his judgement and his expertise”.91
Eugene McCague, was asked whether the NTMA should have been in the room, he replied: “I don’t think there was a need for them to be in the room but I assume they were available, if required.”92
When questioned as to whether, in hindsight, the expert opinion of all of the different state authorities was in the room at the time, given that the NTMA was not present, Dermot McCarthy said:
“… It would have been preferable if the senior personnel from the NTMA were available and present but their views were known, and indeed, voiced in terms of the discussion by Kevin Cardiff in particular.”93
When questioned on the issue of whether the discussions would have benefitted from the NTMA view, David Doyle said:
“Well, I think they would, there would potentially have been a more thorough discussion. I know at least one of the people that was there from the NTMA in the Outer Chamber would have been as sceptical or possibly more so sceptical, about one of the financial institutions.”94
Kevin Cardiff explained that he had given the NTMA view to the meeting:
“ I certainly made sure that the … the fact that the NTMA/Merrill Lynch, the team, had a different view was presented to the Taoiseach, the Minister, the Attorney, who were all in the room.”95
Brian Cowen confirmed that their view was presented at the meeting. He said: “The NTMA position had been reflected in what Mr Cardiff had to say, it wasn’t a question they were being ignored or that their position wasn’t being articulated, it was.”96
The Joint Committee asked Brendan McDonagh to speculate on what he would have said to the Taoiseach if his views had been sought. He replied “I don’t think I would have said anything different other than what I’m saying to you now is that I would have pressed strongly for the nationalisation.”97
The Joint Committee heard much evidence about the debate between nationalisation and a guarantee. Dermot McCarthy said “The option of nationalisation of Anglo was considered, but it was concluded that such actions could have more negative than positive effects on market confidence.”98
Brendan McDonagh confirmed that position. He said:
“There was a strong view within the NTMA and certainly by myself and, I believe, by some of my other senior colleagues but, certainly Mr Corrigan, that Anglo and Irish Nationwide should be nationalised”99
He also said:
“Because, I suppose, we were always sceptical about the business model of Anglo Irish Bank. It was, effectively, a monoline institution with, effectively, just mainly property lending, and that it had rapid growth and we just couldn’t understand the business model.”100
The Joint Committee questioned Michael Somers on the NTMA position, particularly at the end of September 2008. Michael Somers said “I’m not saying that I felt strongly about it [the nationalisation of Anglo] at that stage. It was kind of an evolving view.”101
The Joint Committee sought clarification from Michael Somers on the difference in emphasis between his view and that of Brendan McDonagh, given that Michael Somers was “the boss.”He said:
“I know I was, but I would have taken his advice and if he [Brendan McDonagh] felt that that was the correct decision because, as I say, he went into it an awful lot more than I did, I would have accepted his decision and said “okay, yes, I’ll go along with that, We’ll nationalise it “102
John Corrigan was questioned by the Joint Committee on the issue of nationalisation. He responded “well, certainly, I shared the view with Brendan McDonagh, and I think the chief executive was of the same view that Anglo should have been nationalised.”103
Eugene McCague, Chairman of Arthur Cox, stated “I do recall Mr Cardiff strongly argued the case for nationalisation”.104
Brian Cowen was asked “Well, is your testimony this evening (that) the three parties now, that are on record that are in favour of nationalising Anglo, are Mr Cardiff, Mr Lenihan and the NTMA?”He replied “That would be my position.”105
Alan Gray was not present at the meeting. However, as he had spoken by phone to Brian Cowen on the night, the Joint Committee asked him if he thought nationalisation would have been a better option. He said:
“… my view… would’ve been that it would be a mistake unless we had undertaken due diligence… I have seen in so many cases…the private sector comes to the state with a failed institution and wants them to nationalise it and, the cost is always with the taxpayers and...”106
Kevin Cardiff was asked by the Joint Committee why he recommended the nationalisation of Anglo and/or INBS. He replied “I advocated a nationalisation ... with a guarantee for Anglo and a strong public statement, amounting to a political guarantee, for the other banks”.107
When asked why he recommended this, he said “I thought they were shot. Not in solvency terms but in terms of their future businesses. If you think about it, they had a property-based business at a time when property seemed to be slumping”.108
In his evidence, Brian Goggin said:
“In the earlier part of the evening, when there was a discussion around the desirability or possibility of nationalising Anglo Irish Bank or Irish Nationwide, the construct – which would have been very similar to the one that was laid out to me at 11 o clock that morning in Dame Street by the Central Bank and Financial Regulator – a scenario where two banks would have failed and the rest of the banks would have to be provided with a guarantee. I mean, that was the genesis of the input I had going in to Government Buildings that night. So yes, I mean that was a kind of scenario, initially in the early stages of the discussion. These two banks would be dealt with and the rest of the banks would be given a guarantee. But it didn’t play out that way.109
David Doyle said:
“Nationalisation would not, of course, have been a bank failure as such, but it might have been regarded in the panicked market conditions as tantamount to a failure, and indicative of greater dangers”.110
Brian Cowen explained why he had opted for the Guarantee:
“Nationalising a bank meant taking all of the assets and liabilities onto the State’s books there and then, immediately. The nationalisation option was, in effect, an open-ended guarantee. The guarantee option looked like a safer option if it was time-limited.”111
The Joint Committee wanted to establish whether the meeting had taken place against the likelihood that Anglo would not be able to open its doors on Tuesday September 30. The knock-on effects of such a closure would have been serious. John Hurley was asked if Anglo would default without a guarantee being agreed at that meeting. He replied: “It wouldn’t have defaulted because we had made arrangements for emergency liquidity assistance…. We would not have allowed such a situation to happen….”112
John Hurley explained that the arrangements made had been confirmed by a letter of comfort, from the Minister for Finance earlier that day, relating to legal arrangements to ensure emergency liquidity was available to the bank through the Central Bank. John Hurley said, when asked, that he had informed Anglo that day that emergency funding would be available.113
AIB and BOI were each requested to provide liquidity support to Anglo. After some internal consultation each agreed to provide €5 billion until the weekend provided that repayment was guaranteed by the Government.
William Beausang gave evidence that he left the meeting that night after the first part to “prepare the letter of comfort the Central Bank required to provide ELA the next day.”114
John Hurley was asked to confirm that, regardless of the decision taken in Government Buildings that night, Anglo would have continued to function the next day. He said: “Anglo Irish Bank was going to open the following morning”.115
However, he said that that wasn’t the issue, but that:
“The issue was the contagion effect on (sic) Anglo Irish Bank on the entire system...we were in a situation where it was going to be impossible to keep emergency liquidity assistance to Anglo Irish Bank quiet. It was out there in the marketplace that they were in difficulty. The contagion effect from Anglo was very real. And these are risks and you make a judgment on the risk.”116
The Joint Committee asked Dermot McCarthy if it might have been possible to guarantee “the liquidity of Anglo for at least a day”.He said:
“…there would have been strong concern that if one moved to buy a day or two, that that was money that would be burnt, in the context of the immediate issue but also that the prospect then of taking effective, decisive action would be diminished. So it wasn’t seen as a viable alternative.“117
He said that this position was “… very much on the explicit advice of the Governor and the Financial Regulator...”118
Alan Gray was asked if liquidation of Anglo might have been an option. He replied “I believe that there would’ve been a bank run in Ireland and I think the economic consequences would’ve been catastrophe.”119
John Hurley was also asked if the liquidation of Anglo was considered. He replied:
“It wasn’t considered on the night, I don’t agree liquidation was an option…Professor Honohan has his view, I don’t have that view and I would not have advised any government to take that risk.”120
Kevin Cardiff said: “No official advisor advocated a liquidation of Anglo at that point. Even now I think that would have been too dangerous to contemplate.”121
Brian Cowen was also asked his views on allowing a bank to fail. He said:
“Allowing Anglo to fail was simply not an option on the night. It would have implications for the whole system. The costs involved in terms of causing a run on other banks as well would put the whole payments system at risk and cause irreparable damage to the economy as a result of a banking meltdown.”It would, in Governor Hurley’s words, “set the country back 25 years…”122
The Joint Committee spent considerable time trying to establish whether the question of the banks solvency was debated on the night of the Guarantee. The issue is important because as John Hurley pointed out: “If Anglo Irish Bank was insolvent on the night, there would have been no emergency liquidity assistance.”123
Mary Harney, former Tánaiste and Leader of the Progressive Democrats, was asked about the issue of solvency on the night and stated: “the information on which the Guarantee was based clearly did not indicate a solvency issue.”124
When asked by the Joint Committee if the Government Guarantee was “the most expensive bluff in Irish political history.”John Gormley, former Minister and Leader of the Green Party, responded “Absolutely not … we were assured that this was a liquidity crisis and that’s why we introduced the blanket Guarantee on that basis.”125
The Joint Committee asked Brendan McDonagh if INBS and Anglo Irish were solvent. He stated: “I don’t believe they were solvent.”He continued: “If you can’t pay your debts when they are due, you are effectively insolvent.”The Joint Committee put it to him that as he had described insolvency “from an accountancy point of view,”that was this not technically insolvent, he replied:
“No I had bigger concerns, Deputy, that nobody could give me any information…certainly from the regulator’s side, of what their balance sheets …any detail about their balance sheets or asset quality. There just was no information.”126
John Corrigan, in response to a question as to whether he had a view on the solvency of Anglo responded:
“And if you just take the snapshot of the night of the Guarantee, but for the Guarantee, presumably, Anglo wouldn’t have been able to meet its obligations and therefore, arguably, could have been regarded as being insolvent.”127
When John Hurley was asked about when he believed Anglo became insolvent, he replied: “I don’t know the answer to that Deputy, but I mean, it wasn’t insolvent at the time, nor for a considerable period, afterwards, in my view.”128
When questioned by the Joint Committee on this issue, Dermot McCarthy said:
“I think there was an orientation to define the problem as a liquidity one, and it was, of course, in origin, a liquidity one, which meant that the concern about the solvency question, the capital adequacy, the potential exposure on loan books, and so on, wasn’t engaged with as easily as it arguably should have been.”129
He also said:
“I think that the reality was that the information which came to light slowly and painfully over some time should have been known to the system well before the Guarantee.”130
Eugene McCague, Chairman of Arthur Cox said, in relation to Anglo and Irish Nationwide: “I don’t recall anyone arguing the case that they were insolvent on the night.”131
He also said:
“So there was a view that if the liquidity issue wasn’t dealt with, then obviously it would lead to insolvency. But I don’t recall anybody calling it directly and saying “I believe this bank is insolvent as of tonight.””132
Paul Gallagher was questioned as to whether there were people in the room who had serious concerns that some banks were actually insolvent. He replied: “That is emphatically not the case… and I say in my statement that the Governor and the Financial Regulators made it clear the banks were solvent but illiquid.”133
John Hurley said:
“There is no way that a central bank can give emergency liquidity assistance to an insolvent bank; and we can only give emergency liquidity on the basis of a certificate from the Financial Regulator that the bank is solvent.”134
Patrick Neary, said in his evidence to the Joint Committee:
“I didn’t believe that any institution was insolvent on the date of the guarantee. Based on the information available to us, which ... I’ve talked about it before, came in from the returns. They came in from the institutions. And also we had had Pricewaterhouse in in a couple of the institutions and also there was another corporate finance house which was advising one of the institutions, had also looked over the portfolio. And based on all of those sources, there was no evidence that there was a solvency issue in any of the institutions on the night of the guarantee.”135
However, the Governor of the Central Bank and the Financial Regulator’s statement on the solvency of all six financial institutions was based on the loan book analysis of all six financial institutions carried out by PwC. This analysis was carried out under a tight time limit and was reliant on information from management. According to Brian Cowen, their analysis was “hopelessly optimistic”.136 He also said: “Yes, well I mean it is true that in a, in a very turbulent market situation it is difficult to know what’s illiquid and what’s insolvent.”
John Hurley was asked if insolvency of any bank was discussed on the night. He said:
“Not to my knowledge... there would have been, you know, a view that maybe additional capital is required, but that would be a normal discussion. It was not… there was no insolvency discussion that I can recall.”137
David Doyle was asked if there was a concern at the meeting of a risk of insolvency and he replied: “There was. There was an immediate consideration that illiquidity would rapidly become insolvency.”138 He was further asked whether there was a concern that banks themselves, given the loan losses, could be insolvent in the future. He replied:
“Well, that debate around nationalisation reflected the concern that there could be a problem emerging. And if that problem emerged, that would damage the market… So the argument that they should be nationalised related to the concern about the quality of the loan book, but in the case of AIB, Bank of Ireland, EBS, Irish Life and Permanent, there was no such concern. There was a concern about Anglo and Nationwide.”139
Much has been written and said about how the terms and scope of the Guarantee were arrived at. Again the absence of any documentation or formal minutes means that the detail of evidence offered on the terms and scope relies largely on memory.
Brian Goggin was asked if BOI was asking for a guarantee for itself. He said:
“My concern ... my concern in going to Government Buildings was in relation to one specific issue, i.e., a major bank was going to default the following day. The issue of a guarantee was proposed as a possible solution in terms of trying to help the Government deal with the issue. The point that’s being made here, as I interpret it, is that Bank of Ireland, in isolation, absent any other issues in the marketplace, did not require a guarantee.”140
Kevin Cardiff was asked what he believed the banks sought at the meeting. He said:
“Yes, the banks did seek a broad guarantee, including for themselves. Some people say it was four banks, some people say it was six, but if you nationalise two, then you have to look after them ... it’s the same thing.”141
Brian Goggin said:
“My input was that the Anglo Irish Bank and Irish Nationwide needed to be dealt with, they were having a ferocious contagion effect on the system, and that, in that scenario, the rest of the banking system would need to be guaranteed, for a period of time, to give stability to the system.”142
Dermot Gleeson said:
“What we thought we were talking about was a guarantee for AIB, Bank of Ireland and two other banks … In a context where Anglo and Nationwide were about to be taken down.”143
As the discussion moved into the detail of a guarantee, the issue of whether senior debt, subordinated debt and dated subordinated debt would be covered by the guarantee was discussed.
Dermot McCarthy was asked about the inclusion of dated subordinated debt. He said:
“... both the banks and the official side in effect were of the view that it should be included, partly because of the structure of the funding of the banks, and indeed, to a lesser extent the State. But also because of the desire to give a clear, unambiguous, definitive message through the guarantee.”144
John Hurley said: “… if you didn’t really present well and the markets didn’t understand your message, all of the work could go for naught.”145
Michael Somers, although not present on the night to give advice, told the Joint Committee:
“I would have guaranteed deposits. Whether I would have guaranteed the full 100% of deposits or not, I don’t know. I certainly would have balked, I think, at going any further than that because I wouldn’t have felt it was absolutely necessary to go any further than that.”146
When questioned as to whether existing senior bondholders should have been guaranteed, he said:
“I would have needed a lot of persuasion. I mean, my attitude would have been; give as little as you can, until you are pushed to give more and you are absolutely convinced that you have to give more.”147
He also said:
“Normally you wouldn’t include subordinated debt in a guarantee ... dated subordinated debt ... but really the issue had to do with how we would be coherent with markets the following morning.”148
He said that the question was “… do we take the risk of not including subordinated debt when it is not such a big issue in terms of costs in the context of the overall guarantee?”149
In his evidence to the Joint Committee, Patrick Honohan said that Brian Lenihan had told him that he had “…argued strongly not to go down to cover the subordinated debt.”150
John Hurley was asked to clarify if Brian Lenihan was “in the room for that portion of the decision?”and he replied “I believe so, yes.”151
Eugene Sheehy gave his reason for the inclusion of bonds as follows:
“… I certainly argued, that the bonds should be included and the reason for that was if you looked at the mistakes that were made in the US around Lehman’s and the inconsistency from day to day of the regulatory response…”152
He went on to point out that on the night “… AIB had no bonds or subordinated debt instruments that would in any way have been enhanced by the guarantee.”153
Brian Goggin was asked to comment on criticisms relating to the inclusion of such debt in the Guarantee. He replied:
“…I had absolutely no idea whatsoever what the aggregate amount or the maturity profile of the liabilities of Bank of Ireland were on that occasion. I hadn’t even looked at them; they didn’t register on my horizon.”154
Brian Goggin confirmed that BOI had suggested that junior dated bondholders should be included because they were:
“… concerned about the crossover between junior dated... and senior bondholders, senior creditors… it was important from our perspective to ensure that that stability was achieved and that the capacity of the banking system and the sovereign would not be impaired in terms of accessing the very individuals who are both providers of dated subordinated and senior bonds.”155
The technical details of the Guarantee were discussed between the banks and the officials.
Kevin Cardiff said in his statement to the Joint Committee:
“After the decision had been made in principle, I was asked to produce drafts of the final announcement, based on the banks’ wording – I believed that this wording was broader in a number of respects than had been understood by the official parties, and I told the Taoiseach in a side conversation, that if we accepted their wording, ‘the banks would be laughing at us’, or words to that effect – the Taoiseach immediately asked me to ensure the draft reflected the understanding of the official parties as to the decision taken, rather than the banks’ draft.”156
Eugene Sheehy’s contemporaneous note records:
“The Government submitted a form of guarantee(copy attached) [it was not attached when the Joint Committee received this evidence] which in our view, while inspirational in terms in what we were all looking for, fell short on lack of specificity. We had drawn up an alternative form which included language which was more specific and also included a definite timeline... Clearly there was concern on the Government side that this was too specific and would move the obligations very pointedly from the banks to the Government’s balance sheets.”157
He was asked by the Joint Committee about AIB’s “alternative form, mentioned in this note.”158 He replied:
“The honest answer is I can’t remember the piece of paper. We were certainly in dialogue with the Government about technical issues of what should be in, what shouldn’t be in, we could have written it out. I have no piece of paper as a record of the night other than my note (as above).“159
None of these copies or versions of a guarantee was seen by the Joint Committee.
The Joint Committee asked why the decision to offer a blanket guarantee to all the banks was made by way of an incorporeal Cabinet meeting. Dermot McCarthy outlined how the decision arose, as follows:
“…I would say approaching 11 o’clock when that was, if you like, unambiguously clear and I think the Taoiseach made the judgement that it wasn’t going to be feasible to convene a meeting.”160
Dermot McCarthy explained how he organised the meeting:
“I asked a colleague from the Government Secretariat to make contact with the private secretaries of the members of the Government, which would be the normal pattern, to put them on notice that they would be called about an incorporeal later in the night, and the actual incorporeal was conducted, from memory, between about 1.20 a.m. and 1.50 a.m.”161
As Taoiseach, Brian Cowen was responsible for calling the incorporeal cabinet meeting. When questioned by the Joint Committee on the issue, he said:
“Now I take the point and it’s a matter of regret to me …, that it would have been better for me to call a meeting – even if I had to call a Cabinet Meeting at 6 o’clock the next morning, it would have been better. I accept that.”162
The issue of the suitability of the incorporeal cabinet meeting was raised with John Gormley, who said: “It was actually open to any member of the Cabinet to say to Mr Lenihan “I don’t want an incorporeal, I want a full meeting on this. ”163
Dermot McCarthy was asked if “… ringing people, one after the other, at all a substitute for the, kind of, debate that you get around this table, and shouldn’t we be careful about incorporeal cabinet meetings?”
He said:
“Absolutely … and they are, on matters of substance, as opposed to formalities, things like giving permission to the President to lead the State, might have to be done at short notice, that sort of thing is perfectly effectively done in an incorporeal … it’s not desirable, and, in my experience, is only done when it’s unavoidable.”164
The Joint Committee sought to establish how the decision had been made to extend the Guarantee over a two-year period. The Central Bank’s draft press release had proposed a six-month guarantee.
Brian Cowen said: “It was an issue, I think, that would have been discussed when the banks were there and it was an issue that was decided upon ultimately by just ourselves - the State actors.”165
Kevin Cardiff recollected that the banks had sought a longer time period:
“One of them was that the banks’ wording - we had a two-year limit - the banks’ wording, as far as I can recall it, would have said that any new borrowing in the course of that two years would be guaranteed for the full extent of its term.”166
Eugene Sheehy outlined the position of AIB in the following terms:
“It just becomes technically very difficult to do anything with a one-year guarantee, so we recommended a two-year guarantee, and subsequently the European Commission came out and said that that was the only type of instrument that would have had a chance of working; less duration would not have worked.”167
Brian Cowen said: “…the view was that two years seemed to be, in the judgment of those that were there, the best guesstimate they could have of having a credible but time-limited guarantee…”168
When asked by the Joint Committee whether there was any conversation about a potential for a funding cliff at the end of the guarantee period, John Hurley said: “There was a discussion about periods, about ... and the cliff issue ... I think it was probably a substantive point in the determination of the two years.”169
The Joint Committee asked Kevin Cardiff if the issue of capital injections had been discussed at the meeting. He was asked:
“On the night of the guarantee, just for clarification, did anyone from the State side ask any of the institutions present about the likelihood of capital injection by the taxpayer, can you recall?”170
Kevin Cardiff replied: “I don’t recall the specific question being asked, no.”171
The night’s work was coming to an end and officials had been asked to prepare an official statement about the decision to guarantee all the banks. The first draft document included the fact that all the banks were solvent at that time. The bank representatives moved to change this.
Dermot Gleeson said:
“I think the Financial Regulator wanted to include a statement in some sort of press release, Deputy, that “All Irish financial institutions are solvent”, or something like that, and we advised against it… We thought that we were going to take Anglo to the weekend. Anglo was going to be dismantled at the weekend ... and to put a statement out on Monday night saying “All Irish financial institutions are solvent” ... and then people investing in Anglo the next day and finding it dismantled at the weekend, that could cause trouble. That was the point we were making.”172
Eugene Sheehy said: “This was a liquidity guarantee, it didn’t, the solvency issue wasn’t relevant as far as I could see.”173
The final document removed any mention of solvency.
In his contemporaneous note Eugene Sheehy wrote “There were also issues in the Government’s draft which we were uneasy about relating to attestations by the FR [Financial Regulator] that the system was solvent and that all banks were solvent.”174
Brian Goggin was asked for his recollections, “Oh yes, I think ... my recollection is that AIB, I think, made the running on it but we certainly supported the view”.175
Dermot Gleeson said: “Well I suppose we didn’t think some of them were solvent”176
When asked whether AIB had a view that Irish Nationwide was insolvent, Dermot Gleeson replied:
“Well ... I don’t ... I thought ... I am not a chartered accountant, and solvency is one of the deep mysteries of chartered accountancy but we thought Nationwide was irretrievably broke.”177
In his written statement Kevin Cardiff said:
“I pointed out, that while the Regulator was happy to say the institutions were solvent, it was clear that once guaranteed they could not in any circumstance be allowed to fail – and so any capital or cash shortfall would have to be addressed: there would be no choice in the matter”.178
Patrick Neary was asked if he had suggested that such a statement be included in the draft:
“Definitely not and in fact, I never had sight of that draft statement, and the Central Bank Act 1971, I think, makes it quite clear that… because a bank is licensed under the Central Bank Act 1971 is not a warranty as to its soundness. And I think, I know that this is a speculative point, I mean, if it had been put to us at the meeting, the chairman and I obviously would have discussed it. But I would be pretty reluctant to agree to any statement like that – we don’t give warranties as to soundness to anybody.”179
Evidence from the two banks who attended Government Buildings that night conflicts as to what was known or understood by them about the nature of the Guarantee, as they left the meeting in the early hours of the morning.
Brian Goggin said:
“my recollection is that we were informed that the Government had decided they were providing a blanket guarantee for all banks. So when I eventually left Government Buildings that night at about 3.30 a.m., there was no ambiguity in my recollection and in my understanding of what was done that night.”180
He subsequently confirmed that as far as he was concerned: “I left Government Buildings believing there to be a six-bank guarantee.”181
Richard Burrows agreed with the recollection of Brian Goggin and, when questioned about the evidence by AIB that it was a four bank guarantee, stated: “We were all informed at the same time in the same meeting.”182
However, Dermot Gleeson had a different view. He said: “…we had left Government Buildings that night thinking that there were four banks going to survive with the guarantee”183
Eugene Sheehy had a similar recollection to that of Dermot Gleeson:
“When we saw the guarantee document for the first time the following morning, we could not understand why Anglo and Irish Nationwide were included. All our discussions that night were based upon a premise that Anglo was to be taken down.”184
Further clarification was sought by the Inquiry and witnesses confirmed their earlier testimony.
Dermot Gleeson stated: “I am absolutely certain that we were not informed of the blanket guarantee before we left Government Buildings.”185 He cited his “almost contemporaneous notes”186 of a conversation he had with Paul Gallagher. He stated that the:
“Attorney General said to me on a personal basis on the way out of the meeting that I should not assume that the Government was committed to any particular course of action in respect of any institution.”187
In his written response Dermot Gleeson stated: “I have the clearest recollection of that statement from the Attorney General.”188
Brian Goggin reiterated his previous evidence to the Joint Committee and said:
“My evidence given to the Joint Committee is clear. When I left Government Buildings that night at 3.30am, there was no ambiguity in my understanding of what was done that night – the decision had been made. A blanket guarantee was being put in place for six institutions.”189
After the meeting, a Government statement was issued stating that the Bank Guarantee would extend for two years and cover “all deposits (retail, commercial. institutional and interbank), covered bonds, senior debt and dated subordinated debt (lower tier II).”190 In addition the Guarantee would be made for “any new facilities issued from midnight 29 September 2008 and expire on midnight 28 September 2010.”191
The full statement read:
“The Government has decided to put in place with immediate effect a guarantee arrangement to safeguard all deposits (retail, commercial, institutional and interbank), covered bonds, senior debt and dated subordinated debt (lower tier II), with the following banks: Allied Irish Bank, Bank of Ireland, Anglo Irish Bank, Irish Life and Permanent, Irish Nationwide Building Society and the Educational Building Society and such specific subsidiaries as maybe approved by Government following consultation with the Central Bank and the Financial Regulator. It has done so following advice from the Governor of the Central Bank and the Financial Regulator about the impact of the recent international market turmoil on the Irish Banking system. The guarantee is being provided at a charge to the institutions concerned and will be subject to specific terms and conditions so that the taxpayers’ interest can be protected. The guarantee will cover all existing aforementioned facilities with these institutions and any new such facilities issued from midnight on 29 September 2008, and will expire at midnight on 28 September 2010.
The decision has been taken by Government to remove any uncertainty on the part of counterparties and customers of the six credit institutions. The Government’s objective in taking this decisive action is to maintain financial stability for the benefit of depositors and businesses and is in the best interests of the Irish economy.
The Financial Regulator has advised that all the financial institutions in Ireland will continue to be subject to normal ongoing regulatory requirements. This very important initiative by the Government is designed to safeguard the Irish financial system and to remedy a serious disturbance in the economy caused by the recent turmoil in the international financial markets.”192
The Joint Committee sought evidence on the process and timing of legislation to nationalise an institution and the actual date on which the Guarantee became a legal instrument.
When questioned on whether there was legislation ready on the night of the Guarantee to facilitate nationalising of a bank, John Hurley stated “My understanding is legislation was ready.”193
Kevin Cardiff was asked whether:
“legislation that was ultimately used in January ... in around January, (2009) four months later, for all sense and purposes, the same legislation that was available on the eve of the guarantee?”
He replied that: “Well, it didn’t take four months to do it. When we did it, it took a few days. The four-month gap was a policy decision.”194
When asked: “was it ready to go?”he replied: “The legislation could have been in the House while we finished ... middle of the ... middle of the morning, it could have been in the House by that evening.”195
Pádraig Ó Ríordáin was asked if there was already in existence sufficient legislative provision for either nationalisation or a guarantee. He replied:
“Yes, I think there certainly was. So there was ... when we came in there was already a very advanced Bill that had been prepared by the Attorney General’s office, which dealt with nationalisation and which also had sections in there enabling the Minister to provide financial assistance to individual banks.”196
David Doyle was asked if there was legislation available and prepared which would have been capable of advancing the nationalisation of Anglo or another financial institution on the night of the Guarantee. He replied: “It was at an advanced stage and it could have been turned around, with the input of the parliamentary draftsmen and the Attorney, within a very short period.”197
Brian Cowen confirmed his knowledge of this draft nationalisation legislation. He said: “We had legislation ready to go, if we were going some, sort of, a guarantee route. That was ready, you know, so, in fairness, an awful lot of contingency work was done.”198
Eugene McCague drew attention to a section in the Bill which gave the Minister very wide powers to give financial support to a credit institution and financial support, including the word “guarantee”but “that section would not have been adequate to deal with the type of blanket guarantee that was introduced on 30 September.”199 He stated that the “legislation that we were looking at was legislation which had been … around since about May or June … It was based on the Northern Rock legislation…”200
The Joint Committee wanted to establish whether changes could have been made to the Guarantee before the legislation was enacted.
When David Doyle was asked his views, he replied: “When the announcement was made, there was a moral statement made.”201
Paul Gallagher commented:
“I think the issue always was what would be the effect on the financial system. And for a Government to renege on what was clearly a statement intended to quieten the markets would have had very serious consequences and presumably, though it’s not a matter for me to say, the very consequences that were sought to be avoided on the night of the guarantee.”202
Kevin Cardiff was asked: “Did the Minister have the power to guarantee the banks at that stage or did he have to wait for the scheme to be approved?”He replied: “Well, you needed first the legislation.”203
The Joint Committee asked Kevin Cardiff whether there was any discussion along the following lines: “Well, maybe we should actually hold off on this, maybe we should not sign the dotted line in terms of the order and reconsider at least some of the institutions?”204 Kevin Cardiff replied “I don’t recall a discussion about pulling out at that stage. I think we’d gone beyond that point. In practical terms, we were beyond the no return point.”205
He also said:
“...remember, a lot of new money came in on foot of the guarantee but it didn’t come in four weeks later. It started coming in immediately. So, that you would pull out of the guarantee with hundreds of millions, billions and millions of deposits, based explicitly on it, would’ve created a ... would’ve created ... I don’t know. It would’ve been extraordinarily risky.”206
Paul Gallagher explained the passage of the necessary legislation:
“Subsequent to the night of the guarantee, the Credit Institutions (Financial Support) Act 2008 which was initiated in the Houses of the Oireachtas on 30 September, was enacted by 2 October and this legislation empowered the Minister to provide the guarantee … On 15 October 2008 the guarantee scheme was published by the Government and it was formally approved by the Houses of the Oireachtas on 17 October.”207
Paul Gallagher also clarified when the covered institutions became legally guaranteed:
“Well, the ... it seems to me that, as a matter of law, until they became actually members of the scheme - it was the scheme that provided the financial support. The Act provided that financial support could be provided individually or through a scheme. The Government opted for a scheme. That was approved. And to avail of the scheme you had to become a participating institution. And to be a participating institution you had to be designated.”208
On further questioning about whether this meant the banks were covered from the 24th or 29th, he said: “Or the 29th, but I think it was the 29th (October).”209
The following is the sequence of events from the announcement of the guarantee until its coming into effect:
Witnesses reflected on their decision to choose the option of a blanket bank guarantee on 30 September 2008.
Brian Cowen said:
“It has to be emphasised that no decision was risk free. There was no one good or right option that would guarantee a solution to the problem. It was about trying to pick the least worst option...”210
He also said:
“The Governor (Central Bank – John Hurley) made the point that we would have one go at addressing this and if it didn’t work, we may not get a second chance to revisit it as confidence could be gone.”211
Paul Gallagher gave his views in relation to the advice given by John Hurley. He said:
“… he was unstinting and fearless and clear. And he gave very clear and unambiguous advice to the Government and the Government was told the economy will go back 25 years, this is the best you can do.”212
He said that the Government “was advised that the crisis was of systemic dimensions.”213
Alan Gray, who gave advice to Brian Cowen, stated that he believed:
“...the bank guarantee, which was a horrific and unjust decision on the Irish people, was the best option because of the restricted options that were available by the time we got to the night of the 29th.”214
David Doyle’s view was that: “…by the time the end of September arrived, the international meltdown was such that I didn’t really see a practical alternative.”215 He also said it was “...essential to avoid a complete collapse of the banking system and the economy.”216 and “it was the least worst option on the night.”217
When questioned on what would have unfolded over the following day and weeks had the Guarantee not been put in place, John Hurley said:
“I think the banking system would have become unstable. I think there could have been runs on Irish banks. The implications of that would have been devastating for the country and I think you would have seen an unravelling of the economic and financial life of the country over a period of time, and the cost of that would have been horrific.”218
Dermot McCarthy said:
“The advice was that the Government had one opportunity to make a decisive intervention, to stabilise liquidity and secure the Irish banking system. It would have no certainty of success but the alternative was certain disaster.”219
Paul Gallagher was asked if the guarantee decision was taken to save the banks. He replied “…I think it has become part of the narrative and I think it is fundamentally wrong ...it wasn’t about saving the banks, it was about saving the financial system.”220
Brendan McDonagh said:
“When it came to the night of the guarantee and the Government made the guarantee decision - and I respect that’s the Government’s decision - it seemed to be out of the hat that, you know, the least probably viable option in my view. And I mean it’s only my view in terms of the options put forward by Merrill Lynch, was suddenly the one that was pulled out of the hat.”
Brian Cowen outlined his concern that the markets would not accept anything other than a blanket guarantee: “Where a first initiative may be deemed inadequate by the market, putting forward a second course of action could then completely undermine our credibility.”221
When asked “was it moral or just or defensible that such a decision was taken?”222 i.e. for private debt by private entities was to be “….put on to the shoulders of the Irish people,”223 John Hurley replied in relation to the Government decision:
“…the choices were very, very limited. And if they didn’t take a decision to actually manage the situation at that time, I said earlier that I thought our financial system would have come down with extraordinary implications for the country, not just for a week or a few days but for years.”224
In trying to establish what Brian Lenihan thought, the Joint Committee sought the view of Cathy Herbert who was not in the room at the meeting, but was in Government Buildings. She spoke with Brian Lenihan following the decision. She said:
“I think it was about 2.30 a.m. - 3 a.m., I’m not exactly sure”225
“…He was worried, he was concerned. He was worried about ... that the guarantee mightn’t stick, worried that it wouldn’t be enough….”226
Patrick Neary assured the nation on RTÉ’s Prime Time in October that Irish financial institutions were “well capitalised”in comparison to European banks. He expressed confidence that loan losses would be manageable. He said: “Well, I think that, with hindsight, and based on what emerged since in relation to those portfolios, that that assessment was optimistic.”227
On 15 October 2008 Kevin Cardiff emailed officials in the Department of Finance, the NTMA, CBFSAI, the Regulator, the Office of the Attorney General and representatives of Arthur Cox. He laid out some items he thought needed to be discussed including what recapitalisations or consolidations might be required and whether any nationalisations might be required. In his own words these were “brainstorming scenarios”.228
In his evidence to us, he said:
“Well, what I was trying to do was refocus. We had focus on the guarantee. There was a great deal of technical work to be done in a very short time, but I didn’t think that was going to be the last intervention measure by a long shot. It was clear that we had to be ready for other things, and so I was saying,“Okay, guys, clear your heads a little bit, the guarantee is now moving along, continue that work, but we have to start thinking about the other options and the other things”. ”229
Alan Gray also considered that there was a need to start thinking about other options, on the 20 October 2008 he wrote to Kevin Cardiff regarding the need to “focus on starting the effective risk management for the Guarantee and the exit strategy.”He also set out his specific thoughts on a single page on possible actions to increase the capitalisation of the Irish institutions, to reduce capital requirements by increasing liquidity, and to reduce lending in certain institutions.230
In his evidence, he said:
“So I said ... the key points I was making is that I knew that there were ... everyone was very involved in implementing the guarantee but I felt that we ... policy makers needed to focus on the effective risk management for the guarantee and the exit strategy.”231
On 16 October 2008 Jean-Claude Trichet wrote an urgent letter to Brian Cowen in relation to the liabilities covered in the blanket Guarantee scheme.232 The letter, which was copied to Brian Lenihan and John Hurley, said:
“the liabilities covered under the Minister for Finance's guarantee of certain liabilities of systemically important credit institutions designated by the Minister under the scheme include interbank deposits and senior unsecured debt. I am writing to request that the Irish Government arrange that interbank deposits with a maturity of up to three months be excluded from the liabilities covered under the draft scheme.”
He also raised concerns with the manner in which the decision had been taken:
“In this respect, I would like to draw your attention to the ECB opinion on the draft scheme, which was adopted yesterday by the ECB Governing Council. In its opinion the ECB attached great importance to the declaration made by the euro area Heads of State on 12 October 2008, according to which Member States have to act in a coordinated manner to avoid that significant differences in national implementation could have a counter-productive effect, creating distortions in banking markets. The euro area Heads of State also acknowledged the need to work in cooperation with the ECB so as to ensure consistency with the management of liquidity by the Eurosystem and compatibility with the operational framework of the Eurosystem. Against this background, the ECB opinion notes that uncoordinated decisions to guarantee interbank deposits in some Member States should be avoided as they may involve a fragmentation of the euro area money market.”
When questioned by the Joint Committee, Jean-Claude Trichet said:
“The Guarantee was “an initiative of the Government of Ireland, which was not at all a global consensus or a European consensus.”233
“all governments were, of course, shocked by the fact that one particular country was taking an extraordinary decision, including some of your neighbours.”234
“And, again, in a dramatic situation, I don’t criticise the Government of Ireland myself, even if there was a point that we noted as not being optimal from our own legal standpoint.”235
Within months the Government had to provide capital injections for some of the banks, the details of which are in Chapter 8.
Chapter 7 Footnotes
1. AIB, BOI, Anglo, EBS, IL&P, INBS.
2. Brian Cowen, former Taoiseach and Minister for Finance, transcript, INQ00089-025.
3. Dermot McCarthy, former Secretary General, Department of the Taoiseach and Secretary General to the Government, transcript, INQ00108-013.
4. Dermot McCarthy, former Secretary General, Department of the Taoiseach and Secretary General to the Government, transcript, INQ00108-013.
5. John Hurley, former Governor, Central Bank, transcript, INQ00047-074.
6. John Hurley, former Governor, Central Bank, transcript, INQ00047-073.
7. Patrick Neary, former CEO and former Prudential Director, IFSRA, transcript, INQ00132-006/007.
8. Brian Cowen, former Taoiseach and Minister for Finance, transcript, INQ00089-006.
9. Brendan McDonagh, former Director of Finance, Technology & Risk, NTMA, transcript, INQ00090-005.
10. Brendan McDonagh, former Director of Finance, Technology & Risk, NTMA, transcript, INQ00090-004.
11. Kevin Cardiff, former Secretary General and Second Secretary General, Department of Finance, statement, KCA00002-013.
12. Email from Henrietta Baldock, Merrill Lynch to Kevin Cardiff, former Secretary General and Second Secretary General, Department of Finance, DOF03233-002/003.
13. Brian Cowen, former Taoiseach and Minister for Finance, transcript, INQ00089-006.
14. Brian Cowen, former Taoiseach and Minister for Finance, transcript, INQ00089-007.
15. Brian Cowen, former Taoiseach and Minister for Finance, transcript, INQ00089-006.
16. David Doyle, former Secretary General, Department of Finance, transcript, INQ00113-016.
17. John Hurley, former Governor, Central Bank, transcript, INQ00047-069.
18. Jean-Claude Trichet, former President of the ECB, at his appearance at the Royal Hospital, Kilmainham, 30 April 2015, INQ00140-007.
19. Jean-Claude Trichet, former President of the ECB, at his appearance at the Royal Hospital, Kilmainham, 30 April 2015, INQ00140-022.
20. Jean-Claude Trichet, former President of the ECB, at his appearance at the Royal Hospital, Kilmainham, 30 April 2015, INQ00140-027.
21. Jean-Claude Trichet, former President of the ECB, at his appearance at the Royal Hospital, Kilmainham, 30 April 2015, INQ00140-028.
22. Paul Gallagher, former Attorney General, transcript, INQ00110-009.
23. Paul Gallagher, former Attorney General, transcript, INQ00110-010.
24. Kevin Cardiff, former Secretary General and Second Secretary General, Department of Finance, transcript, PUB00350-025/026.
25. Charlie McCreevy, former Minister for Finance, transcript, PUB00346-018.
26. John Hurley, former Governor, Central Bank, transcript, INQ00047-080.
27. Kevin Cardiff, former Secretary General and Second Secretary General, Department of Finance, statement, KCA00002-013.
28. Memo from Merrill Lynch, 29 September 2008, DOF03233-001.
29. William Beausang, former Assistant Secretary, Department of Finance, statement, WBE00051-014.
30. Draft Government press release re Government Guarantee, WBE00019-001.
31. William Beausang, former Assistant Secretary, Department of Finance, statement, WBE00051-014.
32. William Beausang, former Assistant Secretary, Department of Finance, transcript, INQ00127-025.
33. William Beausang, former Assistant Secretary, Department of Finance, transcript, INQ00127-026.
34. Brian Cowen, former Taoiseach and Minister for Finance, transcript, INQ00089-031.
35. Brian Cowen, former Taoiseach and Minister for Finance, transcript, INQ00089-007.
36. Alan Gray, Economist, former Non Executive Director, Central Bank and Managing Partner of Indecon Economic Consultants, transcript, INQ00096-013/014.
37. Brian Cowen, former Taoiseach and Minister for Finance, transcript, INQ00089-007.
38. Alan Gray, Economist, former Non Executive Director, Central Bank and Managing Partner of Indecon Economic Consultants, transcript, INQ00096-022.
39. Alan Gray, Economist, former Non Executive Director, Central Bank and Managing Partner of Indecon Economic Consultants, transcript, INQ00096-049.
40. Kevin Cardiff, former Secretary General and Second Secretary General, Department of Finance, statement, KCA00002-011.
41. Alan Gray, Economist, former Non Executive Director, Central Bank and Managing Partner of Indecon Economic Consultants, transcript, INQ00096-033.
42. Patrick Honohan, Governor, Central Bank, transcript, PUB00273-040.
43. Patrick Honohan, Governor, Central Bank, transcript, PUB00273-040/041.
44. Brian Cowen, former Taoiseach and Minister for Finance, transcript, INQ00089-008.
45. Cathy Herbert, former Special Advisor to former Minister for Finance, Brian Lenihan, transcript, INQ00091-006.
46. Cathy Herbert, former Special Advisor to former Minister for Finance, Brian Lenihan, transcript, INQ00091-019.
47. David Doyle, former Secretary General, Department of Finance, transcript, INQ00113-072.
48. Kevin Cardiff, former Secretary General and Second Secretary General, Department of Finance, statement, KCA00002-009.
49. Paul Gallagher, former Attorney General, transcript, INQ00110-016.
50. David Doyle, former Secretary General, Department of Finance, transcript, INQ00113-014.
51. Brian Cowen, former Taoiseach and Minister for Finance, transcript, INQ00089-008.
52. Kevin Cardiff, former Secretary General and Second Secretary General, Department of Finance, transcript, PUB00350-017.
53. Kevin Cardiff, former Secretary General and Second Secretary General, Department of Finance, transcript, PUB00350-018.
54. Brian Cowen, former Taoiseach and Minister for Finance, transcript, INQ00089-039.
55. David Doyle, former Secretary General, Department of Finance, transcript, INQ00113-039.
56. Email from Brian Halpin, Central Bank to William Beausang, former Assistant Secretary, Department of Finance, DOF03240-001.
57. Eugene Sheehy, former Group CEO, AIB, transcript, INQ00133-029.
58. File Note of Eugene Sheehy, AIB, 29 & 30 September 2008, AIB03324-001.
59. File Note of Eugene Sheehy, AIB, 29 & 30 September 2008, AIB03324-001.
60. File Note of Eugene Sheehy, AIB, 29 & 30 September 2008, AIB03324-001.
61. Kevin Cardiff, former Secretary General and Second Secretary General, Department of Finance, DOT: Core Book 35, KCA00001-274.
62. Kevin Cardiff, former Secretary General and Second Secretary General, Department of Finance, DOT: Core Book 35, KCA00001-274.
63. Eugene Sheehy, former Group CEO, AIB, transcript, INQ00133-029.
64. Dermot Gleeson, former Chairman, AIB, transcript, INQ00123-010.
65. Dermot Gleeson, former Chairman, AIB, transcript, INQ00123-010.
66. Dermot Gleeson, former Chairman, AIB, transcript, INQ00123-011.
67. Eugene Sheehy, former Group CEO, AIB, transcript, INQ00133-013.
68. Brian Goggin, former Group CEO, BOI, transcript, INQ00139-021.
69. Brian Goggin, former Group CEO, BOI, transcript, INQ00139-020.
70. Dermot Gleeson, former Chairman, AIB, statement, DGL00005-003.
71. Eugene Sheehy, former Group CEO, AIB, statement, ESH00002-003.
72. Kevin Cardiff, former Secretary General and Second Secretary General, Department of Finance. statement, KCA00002-011.
73. Kevin Cardiff, former Secretary General and Second Secretary General, Department of Finance. statement, KCA00002-011.
74. Kevin Cardiff, former Secretary General and Second Secretary General, Department of Finance. transcript, PUB00350-005.
75. Kevin Cardiff, former Secretary General and Second Secretary General, Department of Finance, transcript, PUB00350-005.
76. Brian Cowen, former Taoiseach and Minister for Finance, transcript, INQ00089-004.
77. Dermot McCarthy, former Secretary General, Department of the Taoiseach and Secretary General to the Government, transcript, INQ00108-042.
78. Dermot McCarthy, former Secretary General, Department of the Taoiseach and Secretary General to the Government, transcript, INQ00108-042.
79. Dermot McCarthy, former Secretary General, Department of the Taoiseach and Secretary General to the Government, transcript, INQ00108-042.
80. David Doyle, former Secretary General, Department of Finance, transcript, INQ00113-015.
81. Pádraig Ó Ríordáin, Partner, Arthur Cox, transcript, INQ00111-008.
82. Paul Gallagher, former Attorney General, transcript, INQ00110-007.
83. Paul Gallagher, former Attorney General, transcript, INQ00110-007.
84. Brendan McDonagh, former Director of Finance, Technology & Risk, NTMA, transcript, INQ00090-004.
85. Alan Gray, Economist, former Non Executive Director, Central Bank and Managing Partner of Indecon Economic Consultants, statement, AGR00001-026.
86. Kevin Cardiff, former Secretary General and Second Secretary General, Department of Finance, statement, KCA00002-098.
87. Kevin Cardiff, former Secretary General and Second Secretary General, Department of Finance, transcript, PUB00351-021.
88. Brian Cowen, former Taoiseach and Minister for Finance, transcript, INQ00089-121.
89. Dermot McCarthy, former Secretary General, Department of the Taoiseach and Secretary General to the Government, transcript, INQ00108-022.
90. Brian Cowen, former Taoiseach and Minister for Finance, transcript, INQ00089-121.
91. Michael Somers, former Chief Executive, NTMA, transcript, INQ00093-012.
92. Eugene McCague, Partner, Arthur Cox, transcript, INQ00111-026.
93. Dermot McCarthy, former Secretary General, Department of the Taoiseach and Secretary General to the Government, transcript, INQ00108-015.
94. David Doyle, former Secretary General, Department of Finance, transcript, INQ00113-034.
95. Kevin Cardiff, former Secretary General and Second Secretary General, Department of Finance, transcript, PUB00350-021.
96. Brian Cowen, former Taoiseach and Minister for Finance, transcript, INQ00089 -121.
97. Brendan McDonagh, former Director of Finance, Technology & Risk, NTMA, transcript, INQ00090-022.
98. Dermot McCarthy, former Secretary General, Department of the Taoiseach and Secretary General to the Government, transcript, INQ00108-005.
99. Brendan McDonagh, former Director of Finance, Technology & Risk, NTMA, transcript, INQ00090-009.
100. Brendan McDonagh, former Director of Finance, Technology & Risk, NTMA, transcript, INQ00090-009.
101. Michael Somers, former Chief Executive, NTMA, transcript, INQ00093-012.
102. Michael Somers, former Chief Executive, NTMA, transcript, INQ00093-013.
103. John Corrigan, former Director of Funding and Debt Management, NTMA, transcript, INQ00106-008.
104. Eugene McCague, Partner, Arthur Cox, transcript, INQ00111-006.
105. Brian Cowen, former Taoiseach and Minister for Finance, transcript, INQ00089-122.
106. Alan Gray, Economist, former Non Executive Director, Central Bank and Managing Partner of Indecon Economic Consultants, transcript, INQ00096-055.
107. Kevin Cardiff, former Secretary General and Second Secretary General, Department of Finance, transcript, PUB00350-005.
108. Kevin Cardiff, former Secretary General and Second Secretary General, Department of Finance, transcript, PUB00350-053.
109. Brian Goggin, former Group CEO, BOI, transcript, INQ00139-011.
110. David Doyle, former Secretary General, Department of Finance, transcript, INQ00113-005.
111. Brian Cowen, former Taoiseach and Minister for Finance, transcript, INQ00089-006.
112. John Hurley, former Governor, Central Bank, transcript, INQ00047-090.
113. John Hurley, former Governor, Central Bank, transcript, INQ00047-091.
114. William Beausang, former Assistant Secretary, Department of Finance, statement, WEB00051-014.
115. John Hurley, former Governor, Central Bank, transcript, INQ00047-091.
116. John Hurley, former Governor, Central Bank, transcript, INQ00047-091.
117. Dermot McCarthy, former Secretary General, Department of the Taoiseach and Secretary General to the Government, transcript, INQ00108-014/015.
118. Dermot McCarthy, former Secretary General, Department of the Taoiseach and Secretary General to the Government, transcript, INQ00108-014.
119. Alan Gray, Economist, former Non Executive Director, Central Bank and Managing Partner of Indecon Economic Consultants, transcript, INQ00096-054.
120. John Hurley, former Governor, Central Bank, transcript, INQ00047-080.
121. Kevin Cardiff, former Secretary General and Second Secretary General, Department of Finance, transcript, PUB00350-005.
122. Brian Cowen, former Taoiseach and Minister for Finance, transcript, INQ00089-006.
123. John Hurley, former Governor, Central Bank, transcript, INQ00047-114.
124. Mary Harney, former Tánaiste & Leader of the Progressive Democrats, transcript, INQ00136 -112.
125. John Gormley, former Leader of the Green Party & Minister for Environment, transcript, INQ00136-110.
126. Brendan McDonagh, former Director of Finance, Technology & Risk, NTMA, transcript, INQ00090-019.
127. John Corrigan, former Director of Funding and Debt Management, NTMA, transcript, INQ00106-011.
128. John Hurley, former Governor, Central Bank, transcript, INQ00047-115.
129. Dermot McCarthy, former Secretary General, Department of the Taoiseach and Secretary General to the Government, transcript, INQ00108-046 to -047.
130. Dermot McCarthy, former Secretary General, Department of the Taoiseach and Secretary General to the Government, transcript, INQ00108-047.
131. Eugene McCague, Partner, Arthur Cox, transcript, INQ00111-006.
132. Eugene McCague, Partner, Arthur Cox, transcript, INQ00111-013.
133. Paul Gallagher, former Attorney General, transcript, INQ00110-007.
134. John Hurley, former Governor, Central Bank, transcript, INQ00047-114.
135. Patrick Neary, former CEO and former Prudential Director, IFSRA, transcript, INQ00132-074.
136. Brian Cowen, former Taoiseach and Minister for Finance, statement, BCO00002-003.
137. John Hurley, former Governor, Central Bank, transcript, INQ00047-111.
138. David Doyle, former Secretary General, Department of Finance, transcript, INQ00113-054.
139. David Doyle, former Secretary General, Department of Finance, transcript, INQ00113-054.
140. Brian Goggin, former Group CEO, BOI, transcript, INQ00139-037.
141. Kevin Cardiff, former Secretary General and Second Secretary General, Department of Finance, transcript, PUB00350-005.
142. Brian Goggin, former Group CEO, BOI, transcript, INQ00139-011.
143. Dermot Gleeson, former Chairman, AIB, transcript, INQ00123-010.
144. Dermot McCarthy, former Secretary General, Department of the Taoiseach and Secretary General to the Government, transcript, INQ00108-037.
145. John Hurley, former Governor, Central Bank, transcript, INQ00047-075.
146. Michael Somers, former Chief Executive, NTMA, transcript, INQ00093-013.
147. Michael Somers, former Chief Executive, NTMA, transcript, INQ00093-014.
148. John Hurley, former Governor, Central Bank, transcript, INQ00047-074.
149. John Hurley, former Governor, Central Bank, transcript, INQ00047-074/075.
150. Patrick Honohan, Governor, Central Bank, transcript, PUB00273-040.
151. John Hurley, former Governor, Central Bank, transcript, INQ00047-081.
152. Eugene Sheehy, former Group CEO, AIB, transcript, INQ00133-017.
153. Eugene Sheehy, former Group CEO, AIB, transcript, INQ00133-017.
154. Brian Goggin, former Group CEO, BOI, transcript, INQ00139-064.
155. Brian Goggin, former Group CEO, BOI, transcript, INQ00139-022/023.
156. Kevin Cardiff, former Secretary General and Second Secretary General, Department of Finance, statement, KCA00002-014.
157. File Note of Eugene Sheehy, AIB, 29 & 30 September 2008, AIB03324-003.
158. File Note of Eugene Sheehy, AIB, 29 & 30 September 2008, AIB03324-003.
159. Eugene Sheehy, former Group CEO, AIB, transcript, INQ00133-029.
160. Dermot McCarthy, former Secretary General, Department of the Taoiseach and Secretary General to the Government, transcript, INQ00108-030.
161. Dermot McCarthy, former Secretary General, Department of the Taoiseach and Secretary General to the Government, transcript, INQ00108-030.
162. Brian Cowen, former Taoiseach and Minister for Finance, transcript, INQ00089-030.
163. John Gormley, former Leader of the Green Party and Minister for Environment, transcript, INQ00136-014.
164. Dermot McCarthy, former Secretary General, Department of the Taoiseach and Secretary General to the Government, transcript, INQ00108-046.
165. Brian Cowen, former Taoiseach and Minister for Finance, transcript, INQ00089-024.
166. Kevin Cardiff, former Secretary General and Second Secretary General, Department of Finance, transcript, PUB00350-018.
167. Eugene Sheehy, former Group CEO, AIB, transcript, INQ00133-018.
168. Brian Cowen, former Taoiseach and Minister for Finance, transcript, INQ00089-024.
169. John Hurley, former Governor, Central Bank, transcript, INQ00047-094.
170. Kevin Cardiff, former Secretary General and Second Secretary General, Department of Finance, transcript, PUB00351-030.
171. Kevin Cardiff, former Secretary General and Second Secretary General, Department of Finance, transcript, PUB00351-030.
172. Dermot Gleeson, former Chairman, AIB, transcript, INQ00121-022.
173. Eugene Sheehy, former Group CEO, AIB, transcript, INQ00133-053.
174. File Note of Eugene Sheehy, AIB, 29 & 30 September 2008, AIB03324-004.
175. Brian Goggin, former Group CEO, BOI, transcript, INQ00139-032.
176. Dermot Gleeson, former Chairman, AIB, transcript, INQ00123-021.
177. Dermot Gleeson, former Chairman, AIB, transcript, INQ00123-020.
178. Kevin Cardiff, former Secretary General and Second Secretary General, Department of Finance, statement, KCA00002-013.
179. Patrick Neary, former CEO and former Prudential Director, IFSRA, transcript, INQ00132-080.
180. Brian Goggin, former Group CEO, BOI, transcript, INQ00139-013.
181. Brian Goggin, former Group CEO, BOI, transcript, INQ00139-024.
182. Richard Burrows, former Governor, BOI, transcript, INQ00104-035.
183. Dermot Gleeson, former Chairman, AIB, transcript, INQ00123-038.
184. Eugene Sheehy, former Group Chief Executive, AIB, transcript, INQ00133-006.
185. Dermot Gleeson, former Chairman, AIB, clarification statement, DGL00005-003.
186. Dermot Gleeson, former Chairman, AIB, clarification statement, DGL00005-003.
187. Dermot Gleeson, former Chairman, AIB, clarification statement, DGL00005-003.
188. Dermot Gleeson, former Chairman, AIB, clarification statement, DGL00005-003.
189. Brian Goggin, former Group CEO, BOI, clarification statement, BGO00002-003.
190. Government Decision to Safeguard the Irish Banking System, DOT: Core Book 35, KCA00001-298.
191. Government Decision to Safeguard the Irish Banking System, DOT: Core Book 35, KCA00001-298.
192. Government Decision to Safeguard the Irish Banking System, DOT: Core Book 35, KCA00001-298.
193. John Hurley, former Governor, Central Bank, transcript, INQ00047-075.
194. Kevin Cardiff, former Secretary General and Second Secretary General, Department of Finance, transcript, PUB00350-010.
195. Kevin Cardiff, former Secretary General and Second Secretary General, Department of Finance, transcript, PUB00350-009/010.
196. Pádraig Ó Ríordáin, Partner, Arthur Cox, transcript, INQ00111-017.
197. David Doyle, former Secretary General, Department of Finance, transcript, INQ00113-019.
198. Brian Cowen, former Taoiseach and Minister for Finance, transcript, INQ00089-045.
199. Eugene McCague, Partner, Arthur Cox, transcript, INQ00111-007.
200. Eugene McCague, Partner, Arthur Cox, transcript, INQ00111-007.
201. David Doyle, former Secretary General, Department of Finance, transcript, INQ00113-055.
202. Paul Gallagher, former Attorney General, transcript, INQ00110-024.
203. Kevin Cardiff, former Secretary General and Second Secretary General, Department of Finance, transcript, PUB00350-079.
204. Kevin Cardiff, former Secretary General and Second Secretary General, Department of Finance, transcript, PUB00350-079.
205. Kevin Cardiff, former Secretary General and Second Secretary General, Department of Finance, transcript, PUB00350-079.
206. Kevin Cardiff, former Secretary General and Second Secretary General, Department of Finance, transcript, PUB00350-079.
207. Paul Gallagher, former Attorney General, transcript, INQ00110-003.
208. Paul Gallagher, former Attorney General, transcript, INQ00110-023.
209. Paul Gallagher, former Attorney General, transcript, INQ00110-023.
210. Brian Cowen, former Taoiseach and Minister for Finance, transcript, INQ00089-007.
211. Brian Cowen, former Taoiseach and Minister for Finance, transcript, INQ00089-006.
212. Paul Gallagher, former Attorney General, transcript, INQ00110-015.
213. Paul Gallagher, former Attorney General, transcript, INQ00110-013.
214. Alan Gray, Economist, former Non Executive Director, Central Bank and Managing Partner of Indecon Economic Consultants, transcript, INQ00096-045.
215. David Doyle, former Secretary General, Department of Finance, transcript, INQ00113-013.
216. David Doyle, former Secretary General, Department of Finance, transcript, INQ00113-008.
217. David Doyle, former Secretary General, Department of Finance, transcript, INQ00113-017.
218. John Hurley, former Governor, Central Bank, transcript, INQ00047-117.
219. Dermot McCarthy, former Secretary General, Department of the Taoiseach and Secretary General to the Government, transcript, INQ00108-005.
220. Paul Gallagher, former Attorney General, transcript, INQ00110-009.
221. Brian Cowen, former Taoiseach and Minister for Finance, transcript, INQ00089-006.
222. John Hurley, former Governor, Central Bank, transcript INQ00047-121.
223. John Hurley, former Governor, Central Bank, transcript INQ00047-121.
224. John Hurley, former Governor, Central Bank, transcript INQ00047-121.
225. Cathy Herbert, former Special Advisor to former Minister for Finance, Brian Lenihan, transcript, INQ00091-005.
226. Cathy Herbert, former Special Advisor to former Minister for Finance, Brian Lenihan, transcript, INQ00091-005.
227. Patrick Neary, former CEO and former Prudential Director, IFSRA, transcript, INQ00132-101.
228. Kevin Cardiff, former Secretary General and Second Secretary General, Department of Finance, statement, KCA00002-125.
229. Kevin Cardiff, former Secretary General and Second Secretary General, Department of Finance, transcript, PUB00351-042.
230. Letter from Alan Gray to Kevin Cardiff, 20 October 2008, DOF02116-001/002.
231. Alan Gray, Economist, former Non Executive Director, Central Bank and Managing Partner of Indecon Economic Consultants, transcript, INQ00096-023.
232. Letter from Jean-Claude Trichet to Brian Cowen, 16 October 2008, DOT00374.
233. Jean-Claude Trichet, former President of the ECB, at his appearance at the Royal Hospital, Kilmainham, 30 April 2015, INQ00140-031.
234. Jean-Claude Trichet, former President of the ECB, at his appearance at the Royal Hospital, Kilmainham, 30 April 2015, INQ00140-027.
235. Jean-Claude Trichet, former President of the ECB, at his appearance at the Royal Hospital, Kilmainham, 30 April 2015, INQ00140-025.
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