Nationalising earlier ‘would not have averted bailout’

NATIONALISING both Anglo Irish Bank and Irish Nationwide Building Society two years ago would not have averted the need for Government to introduce its bank guarantee scheme, the Dáil’s Public Accounts Committee has heard.

Following last Friday’s release of documents relating to the launch of the bank guarantee in September 2008 — which showed that the Government was advised on other options such as nationalising the two institutions and offering a narrower, less costly lending scheme than the guarantee — the committee yesterday questioned the Department of Finance’s secretary general, Kevin Cardiff.

Mr Cardiff said that advice from the likes of consultants Merrill Lynch and PricewaterhouseCoopers (PwC), saying that Irish banks were basically well-capitalised, didn’t necessarily mean that there wasn’t a financial stability problem in the sector and that the rate at which the situation regarding bank funding deteriorated warranted a broader guarantee.