Banking Inquiry: Guarantee should have been temporary

The bank guarantee should have been designed as a temporary measure until losses in the banks could be determined, the economist and broadcaster David McWilliams told the banking inquiry yesterday.

Banking Inquiry: Guarantee should have been temporary

He told the then finance minister Brian Lenihan any guarantee should be conditional, and not open-ended as that might lead to the State picking up debts from risk capital.

“I said that you have to introduce a holding guarantee to buy you time until you find out the facts,” he said. He added that at no stage did he tell the minister a guarantee should include subordinated bondholders.

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