Business Irish

Thursday 17 October 2019

‘Bank guarantee was panic but Brian Lenihan did his best’ reporters

Ireland’s decision to guarantee savings in Irish banks in September 2008 smacked of panic rather than a plan, Britain’s former Chancellor of the Exchequer, has said.

And the first Alistair Darling heard of it was on the BBC four hours after the seismic decision was made.

In his memoirs published today, the former Labour Chancellor says Ireland's decision to guarantee savings had been taken at 2am and he heard about it on the 6am BBC radio’s Today programme.

Mr Darling said he feared savers in British banks would shift their money to UK branches of Irish banks.

He told the late Finance Minister Brian Lenihan by phone that morning that the British had been put in an impossible position and would take action if it became clear funds were flowing from British to Irish banks.

The guarantee smacked of panic rather than a plan and he had been aware of disagreements between Brian Cowen and Brian Lenihan, Mr Darling said.

However he said he had a good working relationship with Brian Lenihan who - he says - worked tirelessly for his country after being diagnosed with cancer.

Alistair Darling served as Chancellor under Gordon Brown until Labour lost power last year.

The full extent of their feud was revealed in a serialisation of Mr Darling’s memoirs over the last week.

Mr Darling accuses Mr Brown of “hopeless” leadership and “appalling behaviour” during his premiership, during which he claims Mr Brown failed to deal with the financial crisis.

He claims that Gordon Brown was so misguided as prime minister that he was convinced the worst economic downturn in recent years would be over in six months.

The book, Back from the Brink: 1,000 Days at No 11, describes the atmosphere at Downing Street as “a permanent air of chaos and crisis”.

Mr Darling, 57, describes Mr Brown’s time as prime minister as a “brutal regime” and tells of how their once close relationship eventually broke down because Mr Brown refused to accept the serious nature of the financial crisis.

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