Things could have been a lot worse, Kevin Cardiff tells Banking Inquiry
A former secretary-general of the Department of Finance says there was no costless option available to the Government on the night of the bank guarantee.
Former Brian Lenihan aide Kevin Cardiff has told the Banking Inquiry that it was clear on the night that something had to be done urgently.
He said that there were a range of options available and ready - from nationalisation to the guarantee and large scale loans to the banks.
Mr Cardiff said that he is clear that action had to be taken.
"So of course things could have been different, they might have been a lot worse," he said.
"And it would have been a big gamble to wait a few more days; and maybe having waited if we would then tried to play and the guarantee card, the market and the public simply wouldn't have accepted it."
He later told the Banking Inquiry that a secret group working on a rescue of the banks was established when Brian Cowen was Minister for Finance.
“The fact that the Budget had been brought forward meant that there were lots of people in the building late at night which meant that our team could work under cover of that,” he said.
Mr Cardiff said that they worked late at night and had prepared plans for nationalisation of a bank.
He says the main worry during the summer of 2008 was actually about Irish Nationwide Building Society and not Anglo Irish Bank.
Mr Cardiff said that in early September, the Reuters News Agency ran a story that INBS was about to be liquidated - he said that this was almost a relief as they now had something specific to act on and not just a potential.
When asked by Senator Susan O'Keefe if Minister Lenihan knew about the secret group, Mr Cardiff replied: “Look, it’s a hierarchy. Of course, yes.”
“And the Taoiseach also?”
“Oh yes. This work started back when the Taoiseach was the Minister for Finance.”
