In fairness German, Danish, UK and other foreign banks did make big losses on their investments in Irish subsidiaries - chiefly those based in the IFSC - Irish financial services centre.

What was unconscionable was that the Irish Government, against much advice, chose to guarantee the bond holders in Irish banks in order to shore them up and thinking it was a relatively risk free guarantee that would never be called in. Some of the Irish banks - chiefly the Anglo-Irish Bank were also quite fraudulent in the way that they hid the true extent of their liabilities and continued trading while insolvent.

Had this been just a guarantee for Senior bondholders, a case might have been made there was some long term national interest being served, but the government extended the guarantee to junior bond-holders - who get a higher rate of return in in return for taking on a higher level of risk and who had no entitlement, and perhaps not even an expectation of getting such a guarantee.

Some reforms have been introduced since. There is now greater EZ level of supervision and responsibility for larger banks and the idea of taxpayers bailing out private banks has been "discredited". €60 Billion too late for Ireland I'm afraid... But at least Ireland now has a very high credit rating and an ability to source low cost finance on international markets.

Index of Frank's Diaries