This week the Banking Inquiry report was launched, and one of the most important lines in it is this: 'The withdrawal of Emergency Liquidity Assistance, ELA, was used as an explicit threat to prevent the Government from imposing losses on senior bondholders in March 2011.'

ELA was money the European Central Bank, ECB, loaned to Irish banks after the credit crunch in 2008. With Irish developers unable to pay back their loans, the Irish banks didn't have the cash to pay back their own loans to international investors - the bondholders. The ECB poured money into the Irish banks at very low interest rates to plug this gap and keep them open.

So in threatening 'the withdrawal of ELA', the European Central Bank was in effect threatening to collapse the Irish banking system. It's worth recalling that not only were we, the Irish people, being forced to cover the losses of international investors, we were also being forced to pay them the profit they would have received, had their investments not turned sour - because not only did they get their money back in full, they got paid all of the interest payments as well.

It's difficult to overstate how outrageous this demand of the ECB was. The rules of the market are very clear - if you invest and you win, you get to keep your winnings, and if you invest and you lose, well, you lose. The ECB replaced this with a new rule - if you win you win, and if you lose, and you're powerful enough, you still win . . . and the Irish lose.

The Inquiry finding that the ECB made an explicit threat is important. We already knew that former finance Minister Brian Lenihan was told by the ECB that if he pursued burden sharing with senior bondholders, there would be no Troika programme. What we didn't know was that Minister Noonan was also threatened. In this case not with the pulling of the Troika programme, but with the pulling of the ECB, which could have collapsed our banks.

The severity of that threat suggests there might be a legal case to be taken against the ECB for overstepping its legal mandate. An independent legal review should be conducted immediately to investigate the possibility. Ideally, we'd be able to take a case against the ECB for damages. The NTMA believed that about €9bn could have been saved via burden sharing, which is a lot of cash to go after. Even if this line of legal challenge were not feasible, we should explore the option of seeking a ruling from the European Court of Justice that the ECB overstepped its legal mandate, in forcing the Irish public to cover the losses of international investors.

This could then be pursed in the political arena, where the potential prize is even bigger. There's still €25bn outstanding on the Anglo Promissory Notes. With a ruling from the European Court of Justice that the ECB acted illegally, we could seek a full write down of the Anglo Promissory Notes.

What is deeply frustrating is that it took until now for this information to surface. In his testimony to the inquiry, Minister Noonan recounted a series of telephone calls he had with Jean-Claude Trichet, then president of the ECB. When Minister Noonan informed Trichet that the Irish government was inclined to burn the bondholders, Trichet responded on three fronts. He said we'd be in default. Minister Noonan explained that this was a reference to pulling the ELA from the Irish banks, stating that he 'knew the implication of that for ELA'. Trichet also suggested that those working in financial services in Ireland, and particularly in Dublin, mightn't be able to access finance. And thirdly, Trichet stated that "a bomb will go off and it won't be here, it'll be in Dublin."

The finding of the inquiry, that 'the withdrawal of the ELA was used as an explicit threat', is obvious, given this testimony. But in the Dáil in November 2011, I raised all of this with Minister Noonan. I suggested that the ECB were threatening to either withdraw the ELA, or increase the interest rate on it, if Ireland burned the bondholders. The Minister replied that 'Neither of these threats was ever made.' He further stated that "With regard to threats, the ECB does not operate that way. Jean-Claude Trichet is a perfect gentleman."

When questioned at the inquiry, Minister Noonan repeated that he "was never threatened that they'd withdraw ELA or assistance to the Irish sovereign." But he then explains, at several different points in his testimony, that that's exactly what Trichet was threatening. He stated that "in (Trichet) saying that Ireland would be treated as a country in default and a bank would be treated as a bank in default (if senior bondholders were burned), the implications of that to me were clear. ELA could be suspended." He explained that similar warnings had been issued to the late Brian Lenihan, and that Minister Noonan had seen the correspondence.

I believe Minister Noonan misled the Dáil in 2011, when he stated that these threats were never made, and did so on a matter of national importance. The Banking Inquiry members agree that 'an explicit threat was made.' I also believe that such behaviour in other countries, like the UK and the US, would lead to an immediate resignation. I don't however believe we'll see that sort of thing here.

In light of the threats made by Trichet, there were three options open to the Government. Option 1 - burn the bondholders. Option 2 - don't burn the bondholders, and tell the public why. Option 3 - don't burn the bondholders, don't tell the public why, and deny why when asked in parliament.

This Government choose the third option. It's unclear what the public reaction would have been, had we known that Trichet was threatening to collapse our banking system. What is absolutely clear is that the public, who will be paying off the losses of the bondholders for decades, had the right to know.

Defenders of government will of course argue the toss - yes the Banking Inquiry concluded he had been threatened, but maybe he didn't realise it himself. The usual nonsense we've become used to. It feels very like the answers to Deputy Catherine Murphy on Siteserv - it wasn't that anything was being hidden, it's just that she didn't ask the question in the right way.

The inquiry report points to a great many failings that led to the banking crisis. However, at the heart of it all was culture of secrecy in government. The Central Bank has bulked up its regulation in recent years, and measures have been put in place to stop future generations having to bail out private investors. But in the Dáil, the same culture of secrecy is alive and well. If we're to avoid more of the same in the years to come, it needs to change.

Sunday Independent