Jean Claude Trichet denies asking the late Brian Lenihan to “save the banks at all costs” – TheLiberal.ie – Our News, Your Views

Jean Claude Trichet denies asking the late Brian Lenihan to “save the banks at all costs”




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Mr.Trichet has denied phoning Mr. Lenihan three days prior to the infamous bank guarantee to expressly state that the Irish government should save its banks no matter what cost.

He has insisted that there was “no message to Brian, no message to the government of Ireland”, when queried on the issue.

The former head of the European Central Bank (ECB) was speaking today at an IIEA event in the Royal Hospital Kilmainham, where members of the banking inquery put questions to him.

He said: “The bank guarantee was introduced by the Irish government without any coordination with the ECB or any other EU partners.”

Trichet also added that he did not force the Irish government to guarantee and repay all bondholders, and insisted the ECB’s belief then and now is that bailing-in senior bondholders may have had more adverse consequences than benefits.

According to him, the ECB “simply gave advice” on the bondholder issue, and said that the bank did not have the authority to issue instructions to national governments.

He later stated that in conversations with Lenihan “there was an overwhelming sentiment that it would be a very bad idea” to burn bondholders.

Trichet said that “Had bondholders been burned the cost for Ireland would have been considerably higher,” and that it “would have destroyed credit worthiness.”

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