Top civil servant told US our banks wouldn't need bailout
Published 15/12/2010 | 05:00
THE top civil servant in the Department of Finance told US embassy officials the Government would not have to bail out the banks the month after the introduction of the blanket guarantee.
Kevin Cardiff, secretary general at the department since January 2010, was head of taxation and financial services in October 2008 when he told the US embassy a "herd mentality" based on "rumour and innuendo" had created the need to guarantee bank deposits.
The guarantee was introduced on September 29, 2008, and Mr Cardiff spoke to the embassy officials in the weeks afterwards. The exchange emerged in a batch of US cables released by the Wikileaks website.
The embassy cable said Mr Cardiff "pointed out that auditors contracted by his department to look at the books of at least two of the institutions under pressure came away with a 'favourable impression of the loan books'".
It added that Mr Cardiff "stressed that all involved in putting together the package were confident that Government would not be forced to bai lout the banks".
But the US adviser warned that Irish authorities might be "a bit optimistic" about the financial sector's prospects and would have their "work cut out" to rebuild it.