Thursday 27 October 2016

The ever-changing story as to how the €440bn Bank Guarantee came to be

Published 15/06/2015 | 02:30

Brian Cowen
Brian Cowen

Even before the Oireachtas Banking Inquiry came into being, word of Taoiseach Brian Cowen overruling his then Finance Minister Brian Lenihan on the night of the Bank Guarantee in September 2008 had done the rounds.

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Key players and those present on the night had intimated that Mr Lenihan had not favoured the broad €440bn guarantee, but that his boss thought otherwise.

But it was Central Bank Governor Patrick Honohan who spoke those sentiments in public for the first time.

Lenihan and others had favoured "dealing" with Anglo Irish Bank and Irish Nationwide while protecting the other banks, but Cowen overruled him.

Former Taoiseach Mr Cowen has denied overruling his finance minister and his evidence to the inquiry next month is keenly awaited.

During their evidence, former senior bankers from AIB and Bank of Ireland denied they wanted the "broad guarantee" - saying they wanted a more limited four-bank guarantee, excluding Anglo and Nationwide.

On April 29, former AIB chief executive Eugene Sheehy told the inquiry that "we requested a four-bank guarantee, but not the blanket guarantee that was ultimately provided".

But it now appears Kevin Cardiff is to contradict this evidence when he appears before the Inquiry on Thursday.

He is expected to say that the bankers explicitly sought a very broad guarantee.

Cardiff is likely to say he was sent by Cowen to draft a press statement, but that he had strong reservations about this. He told Cowen that if they used the wording as provided by the banks, then they would be laughing at them.

Irish Independent

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