Professor Patrick Honohan:

----- what happened subsequently was between them, they lost €35 billion over the capital. That is what was not perceived. That was the big fiscal cost to the State that was not perceived. If that had been known, then it would have been a different scenario. I absolutely agree with Deputy O'Donnell's point that the signals were clear enough. If one reads that report by Merrill Lynch, it is quite clear that Merrill Lynch, which calls it "State protective custody" because they had just arrived from London, thought the State should seize control over the two banks. Merrill Lynch clearly thinks these banks have no future. In fact the report states at one point:

It is clear that certain lowly rated monoline banking models [guess who?] are likely to be unviable as wholesale markets stay closed to them. ... we believe it is important to act quickly to deal with these institutions to avoid a systemic issue.