Economist Alan Gray stepped out from the shadows on Wednesday and proved to be the star witness on the penultimate day of public hearings at the Oireachtas banking inquiry.

He is one of the country’s most senior economists, working with Indecon, a leading consultancy set up about 25 years ago.

He is also a former director of the Central Bank and Financial Services Authority of Ireland, having been appointed by the then minister for finance Brian Cowen in January 2007.

On the night of the bank guarantee, September 29th, 2008, Cowen, by then the taoiseach, rang Gray for his views on the bank guarantee that was being planned and the likely market reaction. He was the only person outside Government Buildings consulted by the taoiseach that night.

He didn't offer any thoughts during that call about whether Anglo Irish Bank should be nationalised, something that was on the minds of many in Government Buildings. His view, as it turns out, was that it wouldn't have been a good idea in the absence of detailed due diligence.

Unannounced visit

Gray also neglected to inform Cowen during the call that he'd had an unannounced visit to his office earlier that day from then Anglo chairman Seán FitzPatrick and its chief executive David Drumm.

They told him Anglo was experiencing severe liquidity problems but did not ask him to make any representations to the Central Bank or the Government, he said.

The meeting lasted about 10 minutes, and Gray told them they should make their case to the executives of the Central Bank.

Gray now regrets not telling the regulator about the meeting, but said he chose not to tell Cowen because he didn’t want the then taoiseach to somehow misinterpret that he had issues with Anglo.

The infamous Druids Glen meeting in July 2008 at Fintan Drury’s house was then churned over. Also in attendance were Cowen, Gray, FitzPatrick, former Anglo non-executive director Gary McGann, and Drury, who at that stage was a former Anglo director.

This meeting was followed by a game of golf, which Gray did not participate in, and a dinner.

According to Gray, it was a meeting about unemployment, which appears to contradict Drury’s previous evidence. Both are in agreement that there was no discussion of banking issues.

At this remove, it seems incredible that they didn't consider banking issues, given the strains that were already evident in the system, but Gray held firm to this evidence, even under persistent interrogation from Sinn Féin's Pearse Doherty.

He provided 11 pages of notes he had drafted for the meeting, which he was asked to attend by Cowen.

Gray now regrets attending the Druids Glen gathering.

He was at pains to inform the committee that he had no connections with Anglo – be it shares, loans or the benefit of corporate entertainment – and he had no personal relationship with either FitzPatrick or Drumm.

Nor did Indecon have a commercial relationship with Anglo.

Gray revealed the board of the Central Bank was briefed about the plan for a blanket bank guarantee on September 25th, 2008, just four days before the government’s decision.

“There was no suggestion at that time of any option to guarantee some banks but to nationalise others,” he said.

This tells us that detailed analysis of the guarantee option had already been considered by the government in advance of the decision being made on the night of September 29th.

Gray stopped short of suggesting that the blanket guarantee was a pre-determined decision. Given all the evidence to date, you have to wonder how AIB and Bank of Ireland, as per the testimony of their former directors, thought on the night that Anglo and Irish Nationwide were somehow going to be dealt with separately by the authorities.

‘Morally indefensible’

In Gray's view the guarantee was "unjust" to Irish taxpayers, but a "sensible" decision in the context of the evolving crisis at the time and in the absence of support from the European Central Bank.

The decision not to impose losses on senior bondholders was “morally indefensible”, he added.

Gray’s near three hours of evidence on Wednesday showed him to be a man of strong opinions and deep knowledge.

Yet the focus was as much on the things he didn’t say or didn’t discuss at key times in 2008 when the crisis was brewing.

For a man who prefers to stay out of the public eye, Wednesday’s hearing must have been an uncomfortable experience.