Another night of high drama in our financial history
Published 11/11/2013 | 02:00
THERE wasn't an empty seat in courtroom number 12 where the emergency sitting of the High Court would decide the fate of one of the largest credit unions in the country.
It was another historic night in Ireland's recent chequered financial history. Emotive language was used from the off to illustrate the gravity of the situation.
Talk of "contagion" and a "run on the credit union" were used by barrister Paul Gallagher SC, who appeared for the Central Bank.
He conveyed the urgency of the matter, describing how the decision to liquidate Newbridge Credit Union (NCU) would have a catastrophic effect on the wider financial sector.
But the very fact of the court sitting on a Sunday night indicated the seriousness of the issue.
As the usual end-of-weekend traffic went by on the quays outside the Four Court building, inside a lawyer was talking of a new financial crisis in the making.
The possibility of "a run on the credit union" at opening time this morning was raised.
And the problem wouldn't stop there. "A problem in credit unions could cause confidence issues and contagion across the sector," Mr Gallagher said.
"The bank has also considered whether the failure of NCU would be likely to contribute to instability in the banking system or serious damage to the financial system in our economy in the State.
"The bank considers that there remains a real risk that the failure of NCU could lead to contagion in the credit unions sector, which would contribute instability in the banking sector.
For three hours, the legal representatives argued the case.
Then, at around 10.30pm, Mr Justice Eamon deValera said he had "no problem" granting the order. He said there were "two options available, either liquidation or transfer."
"In that scenario, clearly transfer is the preferred option," the judge said.
The hearing ended just before 11pm – it had been another occasion on which Ireland's financial woes had required late night decision making.