Between 1995 and 2006 the Irish economy boomed, fueled in part by cheap capital raised in the interbank market. The same period witnessed an influx of new operators in the banking sector, with less restrictive policies for issuing loans. The new competition and greater flexibility in banking were widely welcomed at the time.
Then, following the credit crunch and the Lehman collapse,
credit virtually disappeared. Building projects were abandoned, property sales crashed, prices plummeted, major developers failed and tens of thousands of building workers lost their jobs. State tax revenues went through the floor.
The Irish banking system also began experiencing serious difficulty financing day-to-day operations. By the end of the summer of 2008, a panic had set in. Faced with the prospect of a bank meltdown, Dublin moved to guarantee its banks in late September, 2008.there is more