Eamon Ryan (Dublin South, Green Party)

I am confident we will as a people.

The other factor to take into account is that the European and other international institutions at the time had all set their direction against such a course - the experience, it would seem, from the 1930s, having scarred into people's minds in the European Central Bank and elsewhere that such an approach of letting things go merely leads to much wider social trouble, not just for the individual country but capable of spreading like a contagion.

Even in the instance of Lehman Brothers, which people might cite as an example of where a bank was let go, the reality was that institution only accounted for approximately 4% of US GDP in scale, whereas some of our institutions in immediate crisis accounted for over half of our GDP in scale, according to the size of their balance sheet. When one reads what happened in the US, rather than merely a "let it go" policy, there were frantic efforts right up to the day before Lehman Brothers went into difficulty to try to avoid such a scenario using the approach that they had available to them in the US of merely merging banks to try to cover the difficulty. We did not have that option available to us, unfortunately, because of the crazy liquidity situation that had developed in Irish banks. The collective madness that had developed around property lending meant that we did not have a sufficient banking sector to pick up the pieces from any one other institution.

Letting them go or letting them merge and letting the banking system manage us through this crisis was not an easy option. It would have gone contrary to everything the European Central Bank and the European Union, and the US Federal Reserve and the Bank of England, and all of the other authorities that were advising us here at home, were saying we needed to do in the circumstances.

A second approach that was considered in some real detail was following something similar to what the UK Government had introduced, an insurance premium scheme covering future losses in the banks coming from these assets and loans that were impaired or, in our case, effectively, eviscerated. That would not have been the right approach. There was argument at the time that it would not have worked here as it had in the UK because the UK had different circumstances. The UK had a property development construction industry that had access to capital resources that would be able to recover and develop under such an insurance premium scheme, and we did not have that. People were operating here from their back pocket and the money the bank gave them was put into that back pocket.

Even beyond that, such an insurance approach, given the scale and damage that was done in Irish banks, would have left ongoing uncertainty that would have seen continuing contraction and retrenchment in the Irish banking system for however many years such an insurance scheme was in place. The doubt over the scale of the losses would have been well founded and would have placed a question mark on the entire funding and financial situation in this State. Again, while looking back after almost one and a half years, I do not believe that such an insurance model would have worked.

Likewise, some argued for nationalisation. When I got a sense of the scale of the problem we faced in late 2008, my first reaction was to nationalise all the banks because then we could at least manage the situation. I remember bringing such a suggestion to the Minister for Finance at that time. He did not rule it out and he considered all the options as we went through that incredibly difficult period. Ultimately however, he counselled against it and one and a half years later one can at least see that such an approach or solution would not have been effective. Again, there would be no certainty as to the scale of the losses or as to what was the real truth in respect of the banks. Thankfully, banks such as Bank of Ireland, which got into the same mistaken and mad lending, albeit not to the same extent as others, now can act as a fully functioning bank.

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