Brian Cowen (Laois-Offaly, Fianna Fail)

This has been in the public domain since well before Christmas. On the other matter, the issue then was that the bank would be nationalised, long before we nationalised it. That would have meant plugging a large hole in the bank's balance sheet at that time, but the funding position for the State and the banks was very challenging at the time. The State was paying an interest rate of more than 6% on its borrowings then, compared to 4.5% today. That approach would have forced the State to try to borrow huge amounts of additional money at the worst possible time. At best, that would have been a very expensive mistake for the taxpayers.

Fine Gael claims it has a credible banking policy alternative. As I said last week, Fine Gael's banking policy is to threaten to default. We are somehow led to believe that threatening to default on those who provide funds to the banks will reduce the cost of funding the banks. In other words, we say will not pay, but we want more money at a lower interest. That is how credible Fine Gael policy is. Its other idea is to set up a national recovery bank.

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