Professor Alan Ahearne:

That was in early October of 2010 that they were in their line of sight. It was also in the Minister’s line of sight. I use the word, mistakenly, “in principle” because it wasn’t that he gave an order at some stage, you know, on 30 September after the guarantee “Okay, let’s burn them.” It wasn’t that but he, in principle, if the opportunity arose, if it could be done, he did want a haircut of these bonds. He was very concerned about the market reaction, how that would spill over into the sovereign debt market. He was getting strong advice from the NTMA that announcing that there was going to be a burning of senior bonds would have a very negative effect on the sovereign’s access and it would push up interest rates for the Irish Government. He wanted to avoid that, but of course that argument became moot when we got into a situation where Ireland was going to borrow from the official sector and that’s why that opened up that opportunity.