The Government has responded to a call for the publication of the documents on which the decision to give a State guarantee to the main Irish banks was based.
A Government spokesman, in a statement on behalf of Taoiseach Brian Cowen, said that the decision was 'in line with the advice provided directly' by the Central Bank Governor, the Financial Regulator, and senior officials of the Department of Finance and the NTMA.
The spokesman said the advice was based on 'extensive analysis and monitoring conducted by these authorities over the preceding weeks'.
He added that the documentation supporting that analysis will be made available to the independent inquiry into the Banking Crisis, if the inquiry team deem it relevant.
The statement said the decision was taken because of the need to take effective action to restore financial stability on the opening of the markets at 7am the following morning.
The need to restore confidence required that the guarantee be 'robust in scope and duration', it said.
Protecting the interests of the taxpayer was reflected in the decision to provide the guarantee on commercial terms, and this was also the basis for deciding that Anglo Irish Bank - a bank of systemic importance - should be covered by the guarantee, it added.
The option of nationalisation of that bank at that time would have triggered direct exposure of taxpayers to all its liabilities, it said, whereas the guarantee gave the prospect of a resolution at a lower cost.
There was also a risk that nationalisation of one bank would create uncertainty about nationalisation of other institutions, it said.
'Following extensive discussion of all the options the decision was taken with the support of the Governor, the Financial Regulator and the Department of Finance, and in the interest of securing the stability of the Irish financial system at a time of unprecedented crisis.'
Taoiseach accused of 'economic treason'
In the Dáil this morning, Brian Cowen faced criticism from Opposition parties over his handling of the financial crisis at Anglo Irish Bank.
Eamon Gilmore told the Dáil that Brian Cowen wrote a 'blank cheque' for Anglo Irish Bank when he extended the bank guarantee to them in September 2008.
He asked for the publication of all documentation relating to the advice about giving a State guarantee to Anglo Irish Bank.
Mr Gilmore told the Taoiseach that he believed the Government made that decision to protect the vested interests and to protect people with big property interests who were allied to Fianna Fáil.
Mr Gilmore said this was an act of 'economic treason'.
The Taoiseach angrily rejected the accusation, saying he was 'beholden to nobody'. He said the accusation was 'beyond the pale'.
To some applause from his own benches, the Taoiseach said he would never accuse another Irishman of such a thing.
Mr Cowen insisted that if the guarantee had not been extended to Anglo Irish as well as the other banks, Ireland would have gone into a period of stagnation.
He told Mr Gilmore not to question his patriotism.
Mr Cowen also said he took full responsibility for his decisions when Finance Minister, however, he said he did not accept that he was personally responsible for the collapse of the banking system.
Fine Gael leader Enda Kenny accused Mr Cowen of treating taxpayers with contempt.
Last night, the Government easily won the vote on the emergency banking measures, which was passed by 83 votes to 69.
As the depth of the hole in Anglo Irish Bank's books sank in with TDs, the Taoiseach insisted the Government's plan was not about bailing out the banks, rather about bailing out the economy.
He said there are large costs involved but it remained likely that NAMA would deliver net gain for tax payers.
Mr Kenny said the Government's plans for the country's banks represented a 'financial earthquake' with its epicentre at Anglo Irish, and the aftershock of which would be felt for generations.
Labour Party Finance Spokesperson Joan Burton said taxpayers were paying the cost for what she called 'crony capitalism'.
Later, proceedings were enlivened by a noisy spat between Fine Gael’s Michael Ring and Fianna Fáil backbencher Ned O'Keeffe who mounted a strong defence of AIB and criticised the Regulator and the plan to make the bank sell-off what he claimed amounted to the 'family silver'.
