Most of the damage done before bank guarantee, says Central Bank Governor

The Governor of the Central Bank said today that the bank guarantee was not the main cause of austerity.

Patrick Honohan was again appearing before the Oireachtas Banking Inquiry to clarify statements he made previously.

Governor Honohan said that the move to issue a blanket bank guarantee did cost Irish taxpayers billions, but not the full amount of the banking crisis.

"I would say that it would be hard to deny that, and I would hazard a figure of at least 80-90% of the overall hardship was, albeit unbeknownst to the decision-makers that night, already inescapably embedded in the situation," he said.

"The damage had been made unavoidable by the unrestrained credit and property boom."