Secret State files revealed Ireland was wary of entering the 'Bulldog' loan market in the UK because of anti-Irish sentiment over the Falklands and Northern Ireland.

Despite Ireland's financial and economic challenges in the late 1980s, new files reveal successive governments were very wary of the loan market in London.

One briefing memo, between the Departments of Finance and Taoiseach, indicated new rules on the market had put pressure on Ireland to change its traditional stance.

It revealed that leading financial institutions including NatWest, Hill Samuel, Warburg and Morgan Grenfell indicated a willingness to arrange a Bulldog issue for Ireland.

"The Bank of England operates a queue system for this market," the memo revealed.

"Up to recently, we were in an 'outer queue' where it seemed we could stay indefinitely. More recently, however, they changed the rules. We had an opportunity to have an issue in May or June and, as we did not take it up, we go to the bottom of the queue.

"We have not been very anxious to enter the Bulldog market because, (1) the prevailing high interest rate and the expectation these would fall (2) the uncertainty about the exchange rate for sterling and (3) possible anti-Irish sentiment among investors in the UK which could erupt in the course of an issue because of some incident."

The memo noted that the Falkland crisis and Northern Ireland issues could impact on investor sentiment.

Irish Independent