Oireachtas Joint and Select Committees

Thursday, 18 June 2015

Committee of Inquiry into the Banking Crisis

Nexus Phase

Mr. John Moran:

I think it was both. I mean, the ... ultimately what the markets were saying when we were shut out ... I mean, we weren't, I suppose in some ways, shut out, we were just going to be borrowing money at 14%, right, but it's self-fulfilling, because if you borrow at 14%, you now need to pay more interest expense. They were saying, "You cannot repay your debt and we can't have confidence if we give it to you that you will repay it." What could've happened, is if we weren't running a deficit at that time, the ECB had a primary responsibility to keep the banks running. As long as the banks were solvent, the ECB had to continue giving their funding so the ATMs would've kept working. What was important, and the reason it was difficult, was finding money to pay for the ... what you refer to as the deficit, what I refer to as just keeping the country running.

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