On 30 September 2008, the Irish Government announced it would guarantee all deposits and borrowings for Irish banks. There was an international credit crunch in the banking sector at the time, exacerbated by the collapse of US investment bank Lehman Brothers earlier that month. The guarantee was intended to increase liquidity and ensure the banks remained solvent. But the banks' liabilities and exposure to bad loans were far more extensive than the government realised, and Ireland was plunged into debt, leading to an EU-IMF bailout programme of €85 billion in 2010.
David Davin-Power interviews Taoiseach Brian Cowen for the RTÉ Six One News on 30 September 2008. Cowen blames the international financial situation for the Irish banks' predicament and talks about how important it is to ensure the banks have access to funds. Davin-Power asks Cowen repeatedly how he can be sure that the taxpayer is not at risk and will not end up picking up the tab for this. Cowen assures him that those who would be first hit are the shareholders and the secured loans underwritten by the European Central Bank. "If there was a deficit.... the sector would have to make up the difference between the assets and liabilities".