EDITOR'S TAKE: Let's not forget that the original bank rescue was entirely necessary

Hindsight is a wonderful thing, of course, but with the Irish public riding on the crest of a wave of anti-politician and anti-banker sentiment, it's worth taking a moment to reflect on why the government felt the need to intervene in the first place.

In September 2008, when Ireland's ridiculously inflated property bubble finally burst, and in the context of a burgeoning global financial crisis, it became the first country in the euro zone to slip into recession.

There were real concerns that an Irish bank (and by proxy probably other Irish banks), over-exposed to questionable property loans, was on the brink of collapse. Anglo Irish, even before it emerged as the villain of the piece, had lost half the value of its shares in single session on Monday 29th September 2008 while the ISEQ index lost 13% of its value - the biggest loss in 25 years.

IMF intervention was looming (yes, even then), and the government took the radical step of guaranteeing all retail deposits and debts in six major domestic banks - a rescue package worth €400bn - in a bid to instil some sort of market confidence in the banking system.

It was a gamble, and of course it didn't work, but at the time the plan had its supporters - not least renowned Irish journalist and economist David McWilliams, who described it as a masterstroke:

By keeping the banks liquid, the private sector will solve the problem of writing down bad loans, working with debtors to get the best deal and, most importantly, by doing all this in a controlled, not panicked fashion. When people are panicking, they tend to make the wrong decisions.

Fast forward to December 2008, and the government is forced to take more drastic means - injecting €5.5bn into Anglo, AIB and Bank of Ireland in another attempt to inspire confidence in the banking system and ensure that they are adequately capitalised to service the ailing economy.

In the wake of multiple downgrades in Ireland's credit rating, a worst case price tag for rescuing out Ireland's banks of €50bn, and the eventual scenario of a looming EU bailout we now find ourselves in, 2008 seems like a comparatively halcyon time.

Questions have to be asked about the wisdom of NAMA, though - the government agency created to buy the development loans from the banks at a price that reflects long-term valuation -and indeed they were at the time.

Some of Ireland's best economic commentators, including Constantin Gurdgiev writing for Business & Finance, suggested alternatives. One of these was the concept of a 'NAMA Trust', which he argued would have the greatest benefit to the economy at large:

This envisions the Government injecting funding into the banks in the form of government bonds and receiving in exchange ordinary shares in the banks. Existent shareholders keep their equity and bondholders remain intact. Newly issued ordinary shares in the banks are deposited into a public trust that will hold these shares for a period of time until they can be sold in an orderly fashion. The proceeds of the sale, net of costs to the Exchequer, will be disbursed to all tax compliant residents of the state. At no point in time will the banks be state-owned.

Of course, NAMA went ahead anyway, and the fate of Ireland's economy is now inextricably linked to that of its banking sector. With an EU/IMF rescue plan looming it's easy to paint a picture of evil bankers dragging the country into ruin.

Comments from Olli Rehn, the EU economic and monetary affairs commissioner that the Irish banking sector has to be made "viable and sustainable" and that this "will require quite some reorganisation and restructuring" suggest that more redundancies are on the cards within these institutions as they're required to slim down.

The finger justifiably might be pointed at the Irish banking sector, but financial services workers in the country continue to suffer as well.

It's also worth remembering there's a precedent for refusing to use fiscal or monetary policy to intervene in the fate of the companies in the run up to the Great Depression, during which 9,000 banks failed during the decade of the 1930s and depositors saw $140bn disappear by 1933. It's not quite that bad...