Senior managers at Anglo Irish Bank believed the bank was destined for collapse - just days before the bank guarantee.
A senior official at the bank says its top managers thought there was no way Anglo could survive the turmoil that followed the collapse of Lehman Brothers.
He said the bank had struggled through 2008 but the collapse of Lehman, in early September 2008, had triggered a run on deposits.
He added that drastic measures were taken to try and damn down any public concern about the health of the bank - with customers moved into meeting rooms, and off the streets, in order to stop queues from forming outside its Dublin HQ.
But nonetheless, he said in the days that preceded the bank guarantee, there was a sense among the bank's senior management that a failure was inevitable because there was no way to account for the large volume of deposits being withdrawn.
Peter Fitzgerald also told the Banking Inquiry that Anglo's actions can never be defended or forgiven.
Our political correspondent Gavan Reilly reports.
