It was the year when just about everything that could go for wrong for the Irish banks did go wrong. Their share prices collapsed, bad debts soared and many senior bankers were forced to quit in disgrace. It was a year bankers would rather forget.
After the enduring the opening months of the credit crunch and seeing their share prices falling by an average of more than a third in 2007 most Irish bankers were hoping that 2008 would bring better news.
At first these hopes seemed to be justified. On February 20 AIB published its full-year 2007 results showing an 18pc increase in operating profits to €2.25bn, a 13pc increase in earnings per share and a reduction in its bad debt charge from an already low €118m to just €106m.
Just for good measure AIB announced a 10pc increase in its full-year dividend. Crisis, what crisis, seemed to be the message from Ireland's largest bank.
When in May Bank of Ireland announced its full-year results, the message wasn't quite so optimistic. Bank of Ireland could only deliver a 6pc increase in underlying profits to €1.79bn, while the growth in underlying earnings per share was even more anaemic at just 4pc.
However, despite more than doubling his bad debt charge to €232m, Brian Goggin still managed to increase the dividend by 5pc.
While Bank of Ireland was showing definite signs of pulling in its horns in the expectation of harder times ahead Anglo was still apparently going like gangbusters with chief executive David Drumm announcing a 17pc increase in first half pre-tax profits and a 15pc jump in earnings per share.
There was only one problem with all of this more-or-less good news coming out of the banks. Despite assuring us that all was well and that the worst that could happen to them was a "soft landing", their share prices continued to plunge.
By the end of May the share prices of the four quoted Irish banks had fallen by a further 18pc since the beginning of 2008.
Internationally the near-collapse of Wall Street investment bank Bear Stearns in March served as an unwelcome reminder that the credit crunch hadn't gone away.
However, it was investor fears about the failure of the Irish-owned banks to make adequate provision for bad debts on their more than €300bn of property-based lending which lay at the heart of the problem.
Then in July, in what even at the time looked suspiciously like an act of hubris, AIB announced a 10pc increase in its half-year dividend.
This was despite revealing that it expected full-year earnings to fall by 10pc. Announcing the dividend increase, AIB boss Eugene Sheehy went on to state that he would rather die than have to raise extra capital.
Following this performance, Nemesis wasn't long in making an appearance.
Throughout the summer the domestic economy went downhill rapidly, while the Irish banks were finding it ever more expensive to borrow money from overseas banks on the inter-bank market.
Then in September the external financial crisis and the worsening domestic economy combined in a manner which briefly threatened to destroy the Irish banking system. It started when US Treasury Secretary Hank Paulson refused to organise a bail out for Wall Street investment bank Lehman, as he had done for Bear Stearns six months earlier.
Lehman duly filed for bankruptcy on September 14 plunging the international financial system into its worst crisis of confidence for almost 80 years.
This crisis of confidence pushed up the cost to the Irish banks of borrowing on the inter-bank market to prohibitive levels. With the Irish banks depending on wholesale funding to finance over half their loan books, disaster loomed.
At the same time, nervous depositors were pulling their money out of the beleaguered Irish banks while investors were dumping the shares for any price which they could get.
Matters came to a head on September 29 when the share prices of the Irish banks fell by a massive 25pc on a single day. With their share prices in free fall and the threat of an imminent run on one or more of the Irish-owned banks by nervous investors too pressing to ignore, the Government was forced to act.
After a night of crisis talks the Government unveiled its unconditional guarantee of the deposits and bonds of the Irish-owned banks.
Despite exposing the Irish taxpayer to potential liabilities of almost half a trillion euro, the guarantee had only a limited effect.
With their capital largely exhausted by massive but as yet largely unacknowledged bad debts, the Irish-owned banks had effectively stopped making new loans by the final months of the year.
This reality was reflected in their share prices which, after a brief rally, continued to fall.
By mid-December the share prices of the Irish-owned had fallen by a further 75pc from their levels of September 29, and had collapsed by over 90pc since the beginning of 2008.
While the recapitalisation scheme belatedly announced by the Government on December 21, under which the state promised to inject up to €7.5bn of fresh capital into AIB, Bank of Ireland and Anglo, led to a minor rally in AIB and Bank of Ireland shares, Anglo shares kept falling.
Under the terms of the recapitalisation, the State will get 25pc voting rights at AIB and Bank of Ireland and 75pc at Anglo, effectively nationalising the bank which came to epitomise the Celtic Tiger years.
Coming just days after the enforced resignations of Anglo chairman Sean FitzPatrick and chief executive David Drumm after it emerged that FitzPatrick had concealed €87m in Anglo loans from shareholders, the recapitalisation, in reality a State rescue, completed the humiliation of the banks.