The final report of the Banking Inquiry is set to find major fault with both the Financial Regulator and the Central Bank - and question the necessity of a blanket bank guarantee on the night it was introduced.

Today FM understands the report will come down hard in particular against the Central Bank and the Financial Regulator, which had been split off from the bank in 2003, five years before the collapse.

It's understood the final report will find that while both the Regulator and the Bank had sufficient powers to intervene in the banking sector, ultimately neither did.

It will also question the rationale of a one-off blanket guarantee, suggested by many inquiry witnesses as the only option to try and restore confidence in the banking sector.

Their rationale was that an initial partial guarantee, if unsuccessful in winning the confidence of bank investors, could not then have been followed up by a second incrementally larger guarantee - as the failure of the first would raise questions about the financial security of the State itself.

But Today FM believes the report will place significant weight on the existence of 'a letter of comfort' which had already been agreed in principle between the Central Bank and Anglo Irish Bank on the day before the blanket guarantee was introduced. 

This letter was issued by Brian Lenihan, the Minister for Finance, and presented to the Central Bank on Monday 29 September - before the guarantee was agreed.

The bank's then-governor John Hurley told the inquiry in his evidence that this would have been necessary for Anglo to gain access to 'emergency liquidity' - essentially a short-term cash lifeline - if and when it might be needed.

Today FM understands the inquiry will point to evidence that emergency cash had therefore already been sent to Anglo, enabling it to open on the morning of Tuesday 30 September - and that therefore the 'one shot' logic behind the blanket guarantee is open to question as Anglo's immediate viability the next day was no longer in question.

The report is set to be published, pending parliamentary approval, on Wednesday.