THERE'S no question Thursday was a good day for the Banking Inquiry. Those of us sceptical about anything new the inquiry could tell us have to acknowledge Professor Patrick Honohan did provide fresh insight into the banking crash.
However, there is a real danger that Prof Honohan's comments are oversimplified and we will miss the nuances throughout his testimony.
It's understandable that news headlines have focused on his assertion that Anglo should have been allowed fail, that more junior bondholders should have been burned and that Brian Lenihan was overruled on the night of the bank guarantee.
But if the committee focuses solely on those lines, they will miss the big picture. Perhaps Prof Honohan's most important comment - that it wasn't the guarantee, but the failure of the banks in the years leading up to the guarantee, that will end up costing €40bn - has been virtually overlooked.
September 29, 2008, has assumed almost mythical significance in public commentary these last six years. However, the Central Bank Governor stressed that the key time was not that one night, but the years 2004, 2005 and 2006. It was then, he said, that regulatory action to address the crazy lending of our main banks should have kicked in. By the end of 2006, it was too late. There was no decision that could have been taken on the night of the bank guarantee that wouldn't have involved considerable cost to the State.
Prof Honohan was adamant that the extent of the guarantee was too wide - subordinated debt and more long-term bondholders should have been excluded. But he certainly wasn't saying there was some magic wand that night in September that could have saved all or most of the €40bn. The bill for subordinated debt, for example, amounted to €2bn - not to be sniffed at, but only 3pc of the gross bailout costs.
He did baldly state that Anglo should have been liquidated. But it came with certain caveats, not least his concession the bank was "systemic". His argument that on the night of the guarantee, the two Brians should have bought time on Anglo and gone to Europe looking to "hook" them in on some of the cost of winding up the bank is certainly an appealing one. But there's considerable doubt our EU partners would have gone for it.
Prof Honohan himself admitted this was no "slam dunk". The ECB, which was adamant post Lehmans no bank should be allowed fail, might not have been in a frame of mind to facilitate a wind-up. The negative fall-out internationally that followed Ireland's decision to guarantee the banks might also have been in the halfpenny place if Anglo had been let fail and Ireland could have been a "pariah", to use Prof Honohan's term. He also stressed that even if this option had been utilised, it would be "naive" to believe our problems would have gone away. It was certainly fascinating to hear the Central Bank Governor's assertion that Brian Lenihan wanted to nationalise Anglo Irish Bank and Irish Nationwide on that night in September. But even if he hadn't been overruled, that was no panacea. Anglo was nationalised some months later and, again as Prof Honohan pointed out, it still continued to cause the State problems.
Prof Honohan also said that he had "the greatest sympathy for the people in the room" on that night. In the context of the advice they were given, the decisions they made were quite understandable, he added.
That won't be a popular line. But it gets to the heart of the matter - the damage was done long before that night. A narrow focus on the events of September 29 will tell us nothing about why our banks failed and the taxpayer was left on the hook for €40bn.
Prof Honohan's insightful and totally honest testimony will certainly help provide answers. But the committee must delve a lot deeper into his analysis than the headlines he has generated.
Shane Coleman is the presenter of the Sunday Show on Newstalk.com