“YOU must save your banks at all costs.”

According to late Irish finance minister Brian Lenihan, that was the message he received on his phone from European Central Bank chief Jean-Claude Trichet on September 27, 2008, at the height of the financial crisis.

Three days later, Ireland’s government announced a controversial blanket guarantee of the banks. Over the next two years, the country’s banking and property sectors collapsed, costing taxpayers €64 billion ($100 billion).

“Our banks were very dependent on obtaining funding from other countries, and once that began to dry up we knew that would create very serious problems for the Irish banking system,” Mr Lenihan said in a 2010 TV interview before his death.

By Frank Chung

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