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Anglo Irish tapes: Executives deny misleading authorities Anglo Irish tapes: Executives deny misleading regulator
(about 3 hours later)
Executives at Anglo Irish Bank have denied misleading Irish authorities during the 2008 financial crisis, following the release of taped internal phone conversations. Dublin is facing calls for an inquiry into its banking collapse following the release of taped conversations between executives at Anglo Irish Bank.
The recordings reveal executives discussing the size of a government rescue plan, suggesting they were down-playing the sums of money needed. The tapes suggest executives knew the scale of the bank's crisis was much greater than first admitted.
The government is now facing calls for an inquiry. Opposition politicians described the conversations in the tapes as "shocking to the core".
But the executives at the centre of the row have denied attempting to mislead regulators.
Speaking in Dublin, Taoiseach Enda Kenny said: "Believe you me, I understand the rage and the anger of so many people who have been affected by all of this."
Property bubble
Anglo Irish was the first Irish bank to seek government help in 2008.Anglo Irish was the first Irish bank to seek government help in 2008.
It ran into trouble after lending tens of billions of euros to property developers before the collapse of the property market.It ran into trouble after lending tens of billions of euros to property developers before the collapse of the property market.
A government rescue package eventually cost Irish taxpayers 30bn euros ($39.4bn; £25bn). A government rescue package eventually cost Irish taxpayers 30bn euros ($39.4bn; £25bn) and the bank was nationalised in 2009.
But in taped conversations obtained by the Irish Independent newspaper, executives John Bowe and Peter Fitzgerald appear to discuss asking for just 7bn euros from Irish authorities. The banking crisis led to Ireland having to ask the International Monetary Fund and the European Union for a 85bn euro bailout in 2010.
In statements, both Mr Bowe and Mr Fitzgerald denied any wrongdoing or any intention to mislead the Irish central bank. In recorded conversations obtained by the Irish Independent newspaper, John Bowe, head of capital markets, and Peter Fitzgerald, head of the retail bank, discuss a visit to the Irish Financial Services Regulatory Authority (IFSRA).
The meeting was to discuss a 7bn euros "bridging" loan to help bail out the bank.
The two executives can be heard laughing at the term "bridging", because they knew Anglo Irish would never be able to pay the money back given the bank's parlous financial state.
Mr Bowe said Patrick Neary, then head of the IFSRA, intervened at the meeting, wanting assurances that the 7bn euros would be enough to sort out the bank's problems.
But the tapes strongly suggests the bank asked for less than it really needed so as not to scare off the regulator.
'Regret'
In another phone conversation with Mr Fitzgerald, Mr Bowe admits that if the bailout funding is not agreed "we're going to hit a wall in the next week" and that the bank is "already in breach" of its financial obligations.
But Mr Bowe warned that if this happened "it will become apparent that somebody somewhere has borrowed a lot more money, you know."
In another excerpt, Anglo Irish chief executive David Drumm can be heard laughing about "abusing" the state bank guarantee and warning his executives not to be caught abusing it.
In a statement, Mr Bowe said: "I categorically deny the allegation that I, at any time, misled the Central Bank or was aware of any strategy to do so."
He regretted the "language and tone" adopted in the telephone calls, but maintained that the discussions referred to "an envisaged emergency liquidity transaction that did not take place".