THE day before the banking guarantee was announced in 2008, UK government officials knew that the Irish government would bail out Anglo Irish Bank.
Newly released documents from HM Treasury, Britain's financial and economic ministry, reveal that the Irish Financial Regulator told his British counterpart that "the Central Bank/government would support" Anglo if it were "unable to roll €3bn [in funding] overnight".
An email dated September 29, 2008, states that Britain's Financial Services Authority (FSA) was "most concerned about Anglo Irish".
"The FSA talked to the Irish regulator today who also shares concern on a heavy reliance that the bank [Anglo] has on corporate deposits," the email, released to the Sunday Independent under Britain's Freedom of Information Act, states.
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"The Irish regulator is in close contact with the firm. If the liquidity conditions worsened for them, and if they were unable to roll €3bn overnight, then they would have to access liquidity from the Central Bank or government," the email states.
The Irish regulator insisted to Britain that Anglo was "not seen as standing out from others [AIB, Bank of Ireland, etc]".
The Central Bank's fears about Anglo do not seem to have reached the then minister for finance Brian Lenihan until much later in the day on September 29.
It wasn't until 5pm that Padraig O'Riordan, of Arthur Cox, a key adviser to the State in the financial crisis, showed up, which led to a series of frantic meetings which culminated early the following morning with the government holding a rushed cabinet meeting where ministers were awoken from their beds to agree to the blanket guarantee of the six financial institutions.
Less than a month later, on October 21, 2008, HM Treasury regarded Ireland's €400bn guarantee as a bluff.
In a note entitled 'global economic situation', Britain's financial ministry concluded: "On the retail side Bank of Ireland and Allied Irish [Banks] are also significant, as people start to question whether the Irish can afford the guarantee they have put in place."
Anglo, British officials noted, was "finding it difficult" to convince anyone in the market to leave funds on deposit with the bank. It stated, however, "its credit quality is ok".
However, just what Britain knew about Ireland's financial crisis is largely censored, even five years after the blanket guarantee that bankrupted the country.