Alternative to bank guarantee a ‘certain disaster’

The most powerful civil servant during Ireland’s boom and bust has revealed the then government tried to extend the bank guarantee in 2010 because the two year cut-off point was helping to push the country into a bailout.

However, he has rejected claims the guarantee was a “mistake”, despite admitting “with the benefit of hindsight” if government knew then what it does now, the blanket guarantee may not have been considered.

Former Department of the Taoiseach secretary general Dermot McCarthy, who held the position from 2000 until 2011, made the remark at the latest banking inquiry meeting yesterday; but said that having no guarantee at all would have been a “certain disaster”.