The 2008 blanket bank guarantee was the culmination of several years of mistakes being made, but not just by the government, the Oireachtas Banking Inquiry has been told.
At its first public hearing this morning, Finnish academic Peter Nyberg said Ireland was gripped by "real estate mania" in the last decade, but this was not a phenomenon limited to Ireland.
Ireland's banking crisis was systemic but was not unique, the Oireachtas Banking Inquiry's first witness has said.
In relation to the decision by the Fianna Fáil led government to issue the €440bn blanket bank guarantee, Mr Nyberg said it was the culmination of years of mistakes.
"It was the culmination of a lot of mistakes that were made several years before and not only by the government," he said.
He told the inquiry that the guarantee is "not surrounded by a lot of documentation.
He added there were efforts in the last minute, in the Department of Finance, to get legislation sorted to deal with banks in an orderly way, but said ultimately that was not possible given the scale of what happened in September 2008.
He said a lot of people had increased joy as long as the bubble lasted.
Under questions from chairman Ciaran Lynch, Mr Nyberg said that even several months after the guarantee, PWC even concluded the banks were solvent at the time of guarantee.
He said the Government assumed the banks were solvent and that their cash flow problems were temporary.
He said given the pressure on Taoiseach Brian Cowen, Finance Minister Brian Lenihan at the time, he said it was understandable why they saw "no workable alternative to the guarantee".
"This does not imply that it was objectively the best decision possible under any set of circumstances, however a decision had to be made with only the knowledge and preparations available at the time, and had to be be made fast," he said.
Mr Nyberg, said by the time 2009 came around, the economy turned out much worse than expected.
In relation to the banks' external auditors, Mr Nyberg said they did warn their clients of problems to come, and they did discharge the checking of historic accounts.
"The question is was it enough. That is for the inquiry to decide," he said.
During his opening address, Mr Nyberg said the Irish crisis was not unique and was similar to other crises elsewhere.
He said his 2011 report into the crash was about the why of the crisis and not the who.
He said his report was not required to name names, and he decided not to do so.
As a result, legal challenges were easier to avoid by not naming anyone.
The former top civil servant who was in charge of the Department of Finance's banking unit on the night of the bank guarantee has not yet been invited to take part in the banking inquiry, but will be "happy" to participate if the process is open and fair.