Professor Patrick Honohan:

That is the big issue. Ireland got a bad rap for introducing a guarantee but it would have been an even worse rap internationally if they had said, "We don't care what you think. We're just going to liquidate it and to hell with the bondholders". It would have been seen as the European Lehman's and the Government would have been pilloried. That does not mean they should not have done it but they would have been pariahs in international circles. What they should have done was to say ELA and then say, "We have this bank going down. We cannot afford to guarantee. The risks are too big. You have got to risk-share with us. If you want to wind this down orderly you've got to put European capital into this bank and then we will liquidate it down".