Anglo Irish Bank chairman Sean Fitzpatrick slept soundly last Monday night as the government stayed up all night to save his bank, he revealed yesterday.

More than €10bn of funds flooded back into Ireland last week after the government's move to guarantee the six Irish-owned banks.

Regulators and the Central Bank are particularly pleased to see funding returning from the US, the biggest money market in the world.

It was mainly US corporate depositors and funds that withdrew their cash from Irish banks in recent weeks. Between €10bn and €15bn of funds left Irish banks in the previous two weeks as international investors and corporate deposit holders lost faith in Irish financial institutions, government sources said. On one day, one unnamed institution lost over €1bn alone.

In the weeks leading up to Tuesday's decision, various options were raised in talks between the banks, government officials, the Central Bank and the Financial Regulator.

At one point, a takeover of Irish Nationwide by Bank of Ireland was mooted, but this gained no traction and Bank of Ireland declined to comment this weekend.

It has also emerged that the poor fiscal position of the government and the small amount of money available in the Central Bank for any nationalisation scheme was a key factor in last week's decision.

"There was a real question, considering our size, of could we fund these entities if they went into state ownership?'' said one person close to the negotiations.

However, last week's decision could end up denting the credit profile of the government when it comes to borrowing money. On Friday the financial instruments which measure the risk profile of sovereign governments – credit default swaps – rose for Ireland to 70 basis points, more than double their previous level.

This means the markets perceive an increase in the chances of Ireland defaulting on its bonds.

Retaining the confidence of US funds and depositors was one of the key reasons why the guarantee scheme was chosen over the alternative option of nationalising some of the banks.

"Nationalising some banks and guaranteeing others would have created confusion. It would have been neither fish nor fowl,'' said one senior official involved in last week's negotiations.

"We wanted a certain amount of clarity about the message we were sending. We wanted the average fund manager in Boston to understand what we were doing,'' he said.

The immediate trigger for last week's financial crisis was a market rumour that swept London, New York and Dublin on Monday afternoon that at least one Irish bank, most likely Anglo Irish Bank, was to be nationalised.

This prompted a huge range of institutions to dump their shares. The share price decline made counterparties nervous and, as a result, all Irish banks ran into a major liquidity problem, officials claimed last week.

The six institutions are now battling furiously to keep a lid on the level of government charge for the guarantee scheme. The big two banks, Bank of Ireland and AIB, are strongly opposed to paying the kind of charge that is likely to be levied on Irish Nationwide and Anglo Irish Bank, who are perceived to be the weakest of the six institutions, although they both deny this.

Informed political sources said the charges would be levied on a risk basis and differ from bank to bank.

The sources say AIB and Bank of Ireland had been originally opposed to the concept of a bank guarantee scheme, but their stance changed by last Monday when serious funding issues emerged.

The sources also said that after advice from attorney general Paul Gallagher, the government was "sanguine" about reports about potential EU competition issues.

"I don't think there's any concern," said one source.