‘State not told that no bank can fail’

The head of the EU’s Economic and Financial Affairs has denied the group ever explicitly told Ireland that no bank should be allowed fail despite a long-standing belief this was the reason why Anglo Irish was bailed out.

Director general Marco Buti made the claim to the Oireachtas banking inquiry as a separate IMF official told the cross-party group that Ireland’s boom-to-bust fall was the most “extreme” he has ever seen.

Speaking during a three-hour meeting with TDs and senators yesterday, Mr Buti said the widely held view that the position came directly from EU policy set up to prevent contamination of a major crash into other countries was inaccurate.