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Friday 2 December 2016

'Brian Cowen did not over-rule' on bank pledge, former Central Bank boss

Banking

Brian Cowen
Brian Cowen
John Hurley, former Governor of the Central Bank

Former Taoiseach Brian Cowen did not over-rule anyone on the night of the bank guarantee, former Central Bank Governor John Hurley has told the Banking Inquiry.

His evidence conflicts with that of Central Bank Governor Patrick Honohan, who has already told the inquiry that Finance Minister Brian Lenihan wanted to nationalise Anglo and Irish Nationwide banks but was over-ruled by a more senior politician in the room.

Mr Hurley said the blanket guarantee was necessary or it would have "taken decades for the country to recover".

He described how on the night of the guarantee Mr Cowen had chaired an orderly discussion at a "very constructive, well-organised meeting".

"There was no over-ruling by the Taoiseach in my presence," he added.

In the final session of the night, Mr Cowen had recorded the decision and asked every grouping in the room for their view.

"There was no dissent," said Mr Hurley.

He believed the Taoiseach was "very clear" at the final meeting in what he said to the banks about a broad bank guarantee for six banks.

He also said that on the night, given the environment, atmosphere, risks, the amount of subordinated debt and cross-over, he had opted for the inclusion of subordinated debt in the guarantee. Mr Hurley's understanding was that legislation to nationalise a bank was ready or nearly ready.

Mr Hurley, who was governor from 2002 to 2009, accepted that "the Central Bank share of responsibility for what occurred" in the banking crisis.

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