In the US, the reason for stupidity almost comparable to NAMA in our own dealing with TBTFs is pretty clearly the capture of the US Treasury, White House and Senate by the TBTFs through campaign contributions and through cognitive capture, but especially the former. Of course such action is to be expected from the "pro-business" Republican Party, but the extent of the capture was vividly demonstrated by the continuation of the policies by the Obama Administration.

Fianna Fáil is the dominant conservative party in Ireland, if I correctly remember your diary on Irish political parties, so it is natural for them to want to insure the welfare of the bankers as their top priority. That must seem like the natural order of things to them.  There is a natural hierarchy in society and bankers are at the top. Once it was: "The Land and the King are One!"  If the king suffered, the whole country suffered. Now there is no king but there are bankers.  So to heal the country you heal the bankers. This mythic frame is set forth in the movie Excalibur.

Well, things have gotten a little muddy since those pristine times. The Taoiseach, I guess, would have to pass for the king and his chief retainers are the bankers, rather than knights. But true conservatives would know that the government is actually the servant of the nation and that at the top of the national pyramid are the bankers and thus the needs of the bankers are paramount. And this time it is the retainers, (really the owners), that are stricken, but the principle is the same. The first order of business for the government is to save the bankers. "The Land and the Bankers are One." After all the bankers have mortgaged the land.  

But do not the bankers receive the same kinds of generous bonuses in Ireland as in the US and UK?  And do not their donations dominate the political process, as in the US?  If not it must just be the magic of the myth, otherwise known as cognitive capture.

One other factor could be at play.  Christopher Hill described how, during the English Civil War, it became obvious that Charles I was never going to act as the Puritan Parliament wished, but the Parliament could not bring themselves to move beyond the impasse. Hill suggested that they had a "mindstop" that prevented them from deposing and executing the King.  Perhaps a similar "mindstop" is preventing the necessary actions against the bankers in Ireland, the UK and the USA.

"It is not necessary to have hope in order to persevere."