Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

What happened then was that the word got out at Frankfurt that we were thinking of doing this. The statement you read out there I had in my first or in one of the drafts of the speech ... in the draft that I was about to deliver to Dáil Éireann on 31 March. And you'll note it particularly said that I would introduce legislation to achieve the purpose of bond burning. That was because even though there was nothing in law which prevented it, the advice the previous Government had got from their Attorney General, which was confirmed by the new Attorney General, was that even though there was nothing in the Irish Constitution that prevented bond burning, it would need enabling legislation to allow the Government to do it so that was what that reference was about. So I am preparing to go to the Dáil and I get a call from Mr. Trichet and he asks me what are we doing and I told him that we were recapitalising the banks in accordance with the results of the stress testing that had been done. There had been a commitment made in the programme that the recapitalisation of the banks would have taken place in January but my predecessor, Brian Lenihan, decided to defer it - first of all, to have the results of the stress testing and, secondly, he said if there's to be a change of Government, well, it's really the responsibility of the incoming Government and I'm making no criticism of that. I think that was a moral enough thing to do. So Mr. Trichet would have been aware of the plans because they were involved in discussions at the troika. So what it came down to was how we would arrange things and what the amount would be and then I told him that as part of the programme, we were burning bondholders and he didn't agree. He didn't agree and he asked me was I aware that this would be treated by the markets as a default, which was reasonably strong pressure because I know that after the time you've put in here, you understand the details of all this thing. ELA, emergency liquidity assistance, was underpinning Anglo to the tune of €41 billion at that time. ELA can't be given to a bank that defaults.