THE GOVERNOR OF the Central Bank has defended his actions after he was criticised for making the “costliest mistake ever made by an Irish person.”

Patrick Honohan was speaking on RTÉ Radio’s This Week programme and responding to an article in yesterday’s Irish Times in which the economist Morgan Kelly said Honohan’s miscalculation of the scale of Ireland’s bank losses was the “costliest mistake ever made by an Irish person.”

Honohan sought to play down the “hyperbolic language” of Kelly’s article saying that Irish people should “continue to be about as worried as we were before Morgan Kelly’s article.”

Honohan said there were “some serious errors of fact” in Kelly’s article but would not get into the specifics of what they were.

He also insisted that Ireland’s negotiating position on a bailout had not been weakened by his infamous interview on Morning Ireland in November last year in which he admitted Ireland would need a bailout.

Regarding the bank guarantee of September 2008, Honohan said that the fact the final numbers weren’t available did not affect whether or not the country would honour the guarantee to prop up the State’s financial institutions.

He added that there was “no way” the government was walking away from that guarantee.

Honohan concluded that if the debt Ireland owes gets to a quarter-of-a-trillion euro by 2014 as Kelly asserted in his piece then “he’s probably right – it will be unsustainable.”