‘Basic decisions we took were the right ones for the country’

TAOISEACH Brian Cowen was yesterday resolute that the September 2008 blanket bank guarantee of the country’s six main financial institutions “was the right decision”.

Answering journalists’ questions on the importance of newly-released documents outlining the advice the Government received in the run-up to the September 29, 2008, decision to instigate the blanket guarantee, Mr Cowen said: “At the end of the day the basic decisions that we took were the right ones for the country.”

Responding to questions concerning why the Government seemed to have ignored advice from Merrill Lynch and others who cautioned against a blanket guarantee, the Taoiseach repeatedly referred to a report by Central Bank Governor Patrick Honohan published last month which he claims supports the Government’s overall banking policy.

“I think the Central Bank governor’s report confirms the guarantee option was the way forward. He makes some issue of the question of subordinated debt, which made up 3% of the total. I think there is no question that the guarantee decision was the right decision and we stand by that.” In total the subordinated debt guaranteed amounts to several billion euros.

On the issue of whether the bank guarantee decision had been based on misleading information from the banks, Mr Cowen continued: “Obviously NAMA have indicated, there was an element of denial among some of the banks of what the state of play was and that has emerged. But we obviously took our own independent decisions.”

Mr Cowen was asked whether it was now clear that Anglo Irish Bank should have been excluded from the blanket guarantee.

The Taoiseach said: “There was no question but that the question of funding difficulties in the banking system internationally was a factor and obviously it was affecting Irish banks as well and that was what was being sought to be managed.”

He added: “It is important also to point out that one of the conclusions of Prof Honohan and his report in relation to all this is that he doesn’t believe that there was any substantial difference in terms of the outcome whether [Anglo Irish Bank] was nationalised on the night in question or subsequently in January.”