Taoiseach defends bank guarantee

Taoiseach Brian Cowen said today that the Government stands by the decision to guarantee bank deposits in September 2008.

Documents released to the Public Accounts Committee and published this afternoon show the consultants Merill Lynch advised against the guarantee.

Instead they recommended a secured lending scheme for the banks where properties would be exchanged for Government bonds.

The documents also show that the former financial regulator assured the Government three days before the guarantee that Anglo was solvent and was just having liquidity problems.