It was certainly a surprise to many citizens in Ireland as well - came out of the blue to most - but whether it was a surprise to, or in fact required by the ECB we will probably only find out if the enquiry digs out the documents and testimony of the period. The shock for many was that the supposedly safe banks of the poster child economy in Europe were in such trouble.

But I think we are losing sight of the bigger picture here: Even if the Irish Government acted totally alone and without reference to the ECB at the time, the ECB subsequently insisted on a far wider guarantee and protection of bondholders than the Irish Government wanted - and insists to this day, for instance, that the Anglo Irish promissory notes be paid in full - even though the bank is long since defunct.

If it was a mistake in 2008 for the Irish Government to guarantee 2 Banks - when few precedents and no EU supports existed - how much greater a mistake is it for the ECB to insist on even more comprehensive guarantees in 2012, with all the benefit of hindsight they now should have?

Index of Frank's Diaries