"It's time for investors to return to equity markets. Whilst the credit crisis may well not be over, we believe that markets are looking past this and have priced in the bad news at this stage." – Bank of Ireland Private Banking, 18 May 2008.

As this quotation illustrates, it's pretty easy these days to consume a hearty bowl of schadenfreude at the expense of Irish banks and their forecasting departments.

Their foresight has been woeful in the past two years, not only about the economy, house prices and loan write-offs, but even about their own financial performance. The public even ignored their urgings about the Lisbon treaty.

Public statements from chief executives at AIB, Bank of Ireland and of course Anglo Irish Bank appear to have become devalued currency on the markets virtually since August 2007 when the credit crunch officially began in Europe with Northern Rock's liquidity problems.

It's worth lingering over some of the more spectacular own goals, because the influence and credibility of Irish bank executives will be key in the next few days if nationalisation is to be prevented.

Both Eugene Sheehy, chief executive of AIB, and Denis Casey, CEO of Irish Life & Permanent, made statements internally and externally last week saying there is no need for nationalisation, effectively saying 'trust us'.

But institutional funds from London to New York have been refusing to trust many of the banking CEOs. Is there some reason these institutions no longer pay much heed to the reassurances of Irish executives? In fact there may be several reasons.

Bank of Ireland, under the leadership of Brian Goggin, has been more prone than most to making statements that have later been subject to terminological inexactitude, as Winston Churchill put it. Nobody is accusing the bank of deliberately underselling or playing down bad news, but it has certainly said some things it probably regretted.

Last July it told the market that, while it was suffering from "dislocation" sparked by the credit crunch, its capital position continued to fully support its business. By September it was cutting its full-year dividend by 50% and mapping out bad debt charges of 60 to 90 basis points.

Crucially the bank told the market about its funding position, which it said was "strong", and boasted of having €40bn of liquid assets that could be used for contingencies. But less than a fortnight later Brian Goggin found himself sitting in Government Buildings signing up for the state guarantee scheme, which was designed to deal with precisely the issue of liquidity and funding.

This wishful thinking is understandable in such a fast-moving situation, with liquidity drying up all over the western world because of Lehman Brothers.

AIB's public statements have also damaged the reputation of Irish banking, possibly more severely.

Eugene Sheehy's decision at a Goodbody Stockbrokers client meeting on 23 October to offer up a huge hostage to fortune – "we'd rather die than raise equity" – later left many in the markets peeved.

First of all, the statement implied that the bank's capital position was so strong there would be little point in accepting fresh capital from any source. The statement also suggested AIB had "options" to raise money privately. So far there has been no sign this will happen.

The bank's unambiguous stance on outside capital was declared again in a 5 November management statement. But by December it was accepting €2bn of preference share capital from government. It squared the seeming inconsistencies in its statements by saying that, while it did not need capital, technically speaking, the market was now demanding higher capital levels. Still it seemed a long way from the rhetoric of the Goodbody meeting.

The big two of the banking market have not been alone in making statements that sit uncomfortably with events in their own institutions.

EBS told its members a few months ago that, despite the difficult market conditions, it continued "to punch above its weight". These statements accompanied its results for the half-year 2008. Building on its strong franchise in the savings market would get it through a long credit crunch.

Members, not unreasonably, may have concluded the institution was committed to staying as an independent mutual. But leaks to Sunday newspapers indicated around the same time the building society was looking for a strategic partner or a potential sale to a domestic competitor. There have been talks with Irish Life & Permanent since then and Rabobank and BNP Paribas have also been mentioned as potential suitors. Clearly punching above its weight was not enough to maintain its independence.

All of these incidents on their own have not mortally damaged the credibility of Irish banks as much as events at Anglo Irish Bank. Its results statement covering the fiscal year to the end of September was filled with commentary that the markets were clearly not buying into, hence the stock price collapse.

The following gem, for example, left the market unmoved: "Overall asset quality remains strong with 93% of the total loan book rated as satisfactory or above. Of the balance, 1.3% is impaired. The bank is protected by its relationship-based model of lending on a senior debt basis to experienced business people and professional investors".

Weeks later the bank has been nationalised and almost nobody believes impairment charges of 1.3% will be Anglo's benchmark for the future.

Of course ironies abound in hindsight, but in the light of the Sean FitzPatrick loans scandal, this little nugget was more ironic than most: "We lend with a view to retaining loans on our balance sheet rather than selling them on. The bank does not purchase other banks' loans nor do we acquire loans via syndication. This ensures that we have an in-depth knowledge of each and every loan on our book".