Their borrowings from the international market had been mainly at short-term, and the market’s growing reluctance after 2007 to roll over these funds in light of well-founded concerns about the banks’ solvency led the Government to assume the liabilities.
As has often been remarked, there is plenty to criticise in the way in which the September 2008 guarantee was put in place, including the extent of the guarantee, its cast-iron nature, and the lack of consultation with official partners who might have agreed to share the burden.