Brian Cowen (Laois-Offaly, Fianna Fail)

The Governor of the Central Bank said in a report on the banking crisis that an extensive guarantee needed to be put in place otherwise our banks would have run out of money within a matter of days and would have had to close their doors. He went on to paint the appalling consequences of not supporting the banking system. He said the closure of all or a large part of the banking system would have entailed a catastrophic, immediate and sustained economy-wide disruption involving very significant, albeit extremely difficult to quantify, social costs, reflecting in particular the fundamental function of the payments system in a modern economy. These costs would have been broadly based in terms of income, employment and the destruction of the value of economic assets, and would have been on top of the recessionary downturn which had actually occurred.

Let us stop peddling the myth that the guarantee was a misguided intervention. It was supported, as I said, by the vast majority of this House, including the Deputy's party, and it is thanks to that decision that we have a banking system today. We are in the process of restructuring that banking system and I believe that to continually portray that decision as anything other than being motivated by what was in the national interest — in fact it was confirmed by the Governor as being necessary regardless of what people might think of the situation — is not correct as it was a necessary decision which we now have to continue to deal with.

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