Trichet ‘bomb’ warningled to U-turn

Finance Minister Michael Noonan was minutes away from announcing a crucial plan to burn bondholders to the Dáil in March 2011 before then ECB president Jean Claude Trichet phoned him to insist he drop the measure.

The intervention, which contradicts Mr Trichet’s claims, was confirmed for the first time at the bank inquiry and as a senior IMF official said the ECB “worsened” the Irish crisis by putting its own interests first.

Speaking to the cross-party body during its final day of public evidence, Mr Noonan said cabinet agreed on March 28, 2011, to burn senior bondholders, potentially saving up to €8bn.