To do otherwise, in the circumstances of the guarantee, would be to create a situation of default, possibly leading to insolvency of the institutions and a call on the State guarantee. Such a situation was unthinkable in terms of the implications for the State. The promissory notes provided a technical mechanism for providing the capital benefit without the necessity to put the cash upfront. If we consider the impact of unilaterally withdrawing the promissory notes from the institutions at this time, the implications are similar - the institutions would be insolvent. Simply, if one removes €30.6 billion as an asset from the balance sheet of an institution, one will have to fill it from some other source or the institution will fail. This will require payment of all amounts due under all contracts, even the guaranteed ones. Therefore, the State may have to pay a large amount of cash.

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