With the growing prospect of their capital being eroded, and in some cases entirely exhausted, the State was forced to step in to underpin the banking system. 5.
Policy responses  The extent of the deterioration in both the fiscal and banking situations required immediate policy actions and I will now turn to discuss these and talk about the approach taken by the Irish authorities to, first, respond to, and, then, gradually start to begin to work their way out of the crisis.