In the early hours of the morning senior bankers, regulators and the government came to an agreement on a deal to guarantee Irish banks.
In the previous twenty-four hours, the banks had suffered a massive fall in share prices. International investors became anxious about the stability of the Irish banking system and began to withdraw large amounts of money.
In response to the turmoil, the state announced a two-year bank guarantee covering six Irish financial institutions including Allied Irish Bank, Bank of Ireland, Anglo Irish Bank, Irish Life & Permanent, and building societies EBS and Irish Nationwide. The deal is a state insurance policy covering all debt and deposits to the sum of €400 billion.
That's €100,000 for every Irish citizen.
The Irish stock market reacted positively to the announcement of the deal and the Irish banks clawed back their huge losses from the previous days.
Bernard McAlinden of NCB Stockbrokers describes the move by the government as "radical" but says that in the extreme global circumstances, the move is warranted.
Minister for Finance Brian Lenihan says that the deal is necessary for the survival of Irish banks and for economic life in Ireland.
We're talking about their basic capacity to access funds in a world market that is now drying up.
According to Jonathan Dodd, spokesman for the European Commission, the commission will investigate whether the Irish deal is in breach of competition rules as there are foreign banks operating in Ireland and they do not fall under the deal.
Nobody's quite sure what the long-term consequences of this enormous deal will be.
An RTÉ News report broadcast on 30 September 2008. The reporter is David Murphy.
