Government warned bank guarantee ‘high risk’

THE Government was told by its lead consultants not to let any Irish institution fail, but that a blanket guarantee was a high-risk approach.

Merrill Lynch was drafted in as advisers three days before Government swept in to save the banks in September 2008.

At a meeting with Minister Brian Lenihan and his senior civil servants, the Merrill Lynch team said the guarantee would help prop up bad banks and could be a mistake for the nation’s credit rating.