It is a sunny Saturday in late September 2008, and the chief executive of Anglo Irish Bank is nervous.

In the preceding months, the global financial crisis has spiralled out of control: Northern Rock has been nationalised, Bear Stearns wiped off the map, Lehman Brothers bankrupted, Fannie Mae, Freddie Mac and AIG have been nationalised. Now, after years of astonishing growth, Anglo is on the ropes. The share price has plummeted, hedge funds are circling the overvalued company like vultures, and the commercial bank is losing €1 billion a day in deposits.

David Drumm has arranged an emergency meeting with the Financial Regulator to ask for an emergency credit line. He needs €7 billion. "Where did you get that figure from?" the regulator asks. Drumm pauses. "I had a team working on the numbers."

This is a scene from Colin Murphy's Guaranteed!, a lucid and even-handed account of the events leading up to the fateful 2008 bank guarantee, which – speaking of fate – was first performed on the same day the Anglo Tapes emerged. An invented scene, based on fact, it naturally became one of the funniest and most galling moments of the play as the audience heard another answer still echoing from the day's news: "Just as Drummer would say, 'I picked it out of my arse'."

Murphy’s play is diligently researched and cautiously imagined, and prefers to avoid cheap laughs and pot shots, seeking neither to rouse the rabble nor to vilify. Instead, Murphy wants to understand how it had all happened. The shock of the news, though, which his play absorbed, was that you really couldn’t make it up.

In many ways that discrepancy sums up the tensions between Murphy’s approach as a journalist and a dramatist. His play began as something more slanted; a four-minute satirical sketch for Fishamble’s Tiny Plays For Ireland in which the bank guarantee was ultimately decided with the toss of a coin.

Farce remade as tragedy
For this version Murphy has reworked his farce as a tragedy, relying on official transcripts of public events, books and investigative reports by other journalists, and off-the-record interviews with sources close to the events. The resulting piece, which begins with a careful disclaimer stating which elements are real and which are fictionalised, is a sober and swift chronology with a wide scope of inquiry of four years leading towards calamity.

The journalist’s credo – comments are free but facts are sacred – could underpin its writing, to the extent that one might anticipate Murphy’s reluctance towards discussing his feelings about the bank guarantee. It’s nothing personal.

He considers the question for a while. “You’re right, I’m not wildly keen talking about it. It’s an absolutely valid question . . . I don’t know any more. It’s gotten increasingly difficult for me to separate fact from fiction.”

For this project, Murphy has not been keen on fiction. His first instinct is to debunk conspiracy theories about cronyism, incompetence or malice. “In the course of my journalistic work, I found no smoking gun,” he tells me. “It seemed to me that you didn’t need to come up with any of those theories to understand what happened on that night. Look for the most simple answer. It’s likely to be it.”

One reading of Guaranteed! (which director Conall Morrison stages as a "script-in-hand" performance like a rough-and-ready Irish descendant of Augusto Boal's "newspaper theatre") is that it might work as a retrospective justification for the guarantee. By the last stage of the action, the taoiseach says, "There are no good options. They're all bad. We're looking for the least worst." In empathising with the predicament, rather than the players, and allowing each party to put their best case forward, Murphy admirably avoids any form of "they're-all-crooked" cynicism or the kind of comedy that pacifies while it sniggers (Anglo: The Musical springs to mind). But, with legitimate rage over the guarantee, some might find it unsettling that it does come off as "the least worst" option available at the time.

This is Murphy’s first full-length piece for theatre, and it’s tempting to see it as a piece of documentary theatre struggling to become a play, where fluidly edited verbatim transcripts lead to cautiously imagined character conflicts. The two things are not easily reconciled, and Murphy often speaks with a documentary maker’s reluctance to put words into people’s mouths (“Going any further would have been total speculation,” he says of the golf outing, shortly before the guarantee, between taoiseach Brian Cowen and Anglo chairman Seán FitzPatrick).

A playwright might feel freer to speculate, where a journalist should never invent. “The rules I set myself,” Murphy says, “were that I could only fictionalise it to the extent that it was necessary to explain something to the audience.”

The most fascinating character in Guaranteed!, however, is largely fictitious. He is a British hedge fund analyst based on one of Murphy's sources, who, from a very early stage, assesses Anglo with icy dispassion, decides it is massively overvalued and bets it will go bust. He appears for just three scenes, but he feels like the protagonist of another play that Murphy might have written: a clear-eyed outsider, unswayed by politics and rhetoric, who is banking on failure.

“He’s the hero,” Murphy agrees. “He just doesn’t have a lot of stage time. On one level he’s the hero of the play because he’s the one person who does what everyone else should have been doing: finding the true value in things, cutting things down to size.” Ideally, that’s also the purpose of journalism.

On paper, Murphy's path to political theatre sounds quite direct. He studied politics in UCD, where he was a member of the drama society. He joined Concern and spent two years in Angola, a country where "politics is over the edge" and he turned to journalism to report on it. On finishing a master's in politics at Wits University in Johannesburg, he returned to Dublin and began writing reviews for Irish Theatre Magazine. He now writes about theatre for the Irish Independent, makes documentaries for RTÉ and contributes political pieces to Prospect, Dublin Review and others.

The Anglo tapes
After the successful tour of Fishamble's production this summer, Murphy decided to revisit his text for the new tour, introducing the coarse voices of the Anglo tapes: the language of "bolloxology", "give us the moolah" and "another day, another billion" that seemed to confirm the public's worst suspicions about Ireland's financial and political culture.

“Anglo is what happens when you put a rugby team in charge of a bank,” Murphy reasons. “With some of the same strengths and weaknesses.” Ironically, he had cut a similar scene, one of his own devising, “because it was too obviously a moment of comedy”.

“Do I want to think the best of people?” Murphy considers. “I think I’m more interested in when good people go wrong. I’m also very interested in how societies go wrong.”

A few months ago, in the rehearsal room where Murphy and Morrison tussled over details (“Conall fighting for drama and me fighting for journalism”), Murphy was concerned to see the concluding line of one scene, involving the board of AIB agreeing to sell Bank Centre at the height of the property market, played for laughs: “Now, I think we’ve a report from the remuneration committee?” Murphy had considered the line a form of fair comment, but now he worried that the board members were being scapegoated as hand-rubbing Shylocks. “Then I thought, hang on a second. It’s a f***ing play. It’s basically true. Nobody in the audience is reading this part as journalism. They’re going with the ride. So, let the cast kick back a bit.”

It is a richer scene because of it, and a better piece of theatre, the positive effect of a journalist using dramatic licence.