By Padraic Halpin
DUBLIN (Reuters) - The day in late September 2008 that began with former Bank of Ireland chief Brian Goggin being asked to take over a rival and ended with the state guaranteeing the entire sector was the worst of his life, Goggin said on Thursday.
Irish lawmakers are for the first time questioning the executives at the helm of the country's banks when they imploded seven years ago as part of a parliamentary inquiry into the most expensive state bailout in the euro zone.
At the heart of the inquiry are the discussions, much of them so far undisclosed, around the government's 2008 blanket guarantee on all bank liabilities, which effectively tied its fate to the ailing financial sector.
Goggin said he received the "grave piece of news" on Sept. 29 that rival Anglo Irish Bank was going to default the next day when he was approached by the chairman of Anglo to take over the bank. Goggin said Bank of Ireland refused.
He was also asked by the Irish Central Bank governor that day if Bank of Ireland would consider acquiring Irish Life & Permanent, which he said the Central Bank had major concerns over too.
Together with executives from Allied Irish Banks (I:ALBK) (AIB) - the country's other main lender - Goggin then went to government buildings for talks that went through the night and culminated in the announcement of the controversial guarantee the next morning.
"The entire day and the night of the 29th of September was the worst day of my life," Goggin, who was CEO of the bank for five years until his retirement in 2009, told the inquiry.
"The pressure, the stress, the issues I was trying to deal with, it was incredibly stressful and traumatic. As it was for government members and officials."
Unlike executives from AIB Goggin said it was perfectly clear when he left government buildings that all banks - including those who later failed - would be covered by the guarantee. Given the "dreadful predicament", he did not think the government had much of an alternative.
Even as the economy and banks recover, discussions from the night of the guarantee are still a cause of much debate. The digging up of old controversies could also damage the opposition Fianna Fail party, which presided over the crisis, ahead of elections next year.
Bank of Ireland emerged from the crisis as the only Irish lender to avoid full state-ownership, something Goggin said was of cold comfort.
"I regret that state assistance was required to support the bank. I am very sorry this happened on my watch," he said.