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Anglo Irish tapes: Executives deny misleading regulator Anglo Irish tapes: Probe into claims scale of crisis covered up
(about 1 hour later)
Dublin is facing calls for an inquiry into its banking collapse following the release of taped conversations between executives at Anglo Irish Bank. Dublin is to open an inquiry into the bailout of Anglo Irish Bank, following release of taped conversations between former executives.
The tapes suggest executives knew the scale of the bank's crisis was much greater than first admitted. The recordings, disclosed by the Irish Independent newspaper, suggest directors may have concealed the full scale of the bank's problems.
Opposition politicians described the conversations in the tapes as "shocking to the core". Prime Minister Enda Kenny said on Tuesday that the public must learn the truth of Anglo Irish's collapse.
But the executives at the centre of the row have denied attempting to mislead regulators. But executives at the centre of the row denied they misled 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." The tape recordings, from 2008, include telephone conversations about how the bank went about receiving 7bn euros of bailout funds. The bank ended up needing much more.
John Bowe, head of capital markets, and Peter Fitzgerald, head of the retail bank, are heard discussing a visit to the Irish Financial Services Regulatory Authority (IFSRA).
That meeting was to negotiate the 7bn euros "bridging" loan.
The two executives can be heard laughing at the term "bridging", suggesting they knew it would not be repaid 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 internally-recorded tapes strongly suggest the bank asked for less than it really needed so as not to scare off the regulator.
'Deeply disturbing'
Fianna Fail, the ruling party at the time of the financial crisis in 2008, said the tapes should be referred to the police and corporate regulators.Fianna Fail, the ruling party at the time of the financial crisis in 2008, said the tapes should be referred to the police and corporate regulators.
"Any suggestion that the taxpayer was lured into bailing out Anglo Irish Bank under a false impression about the state of the bank's financial condition is deeply disturbing and has to be fully investigated by the authorities," Fianna Fail finance spokesman Michael McGrath said."Any suggestion that the taxpayer was lured into bailing out Anglo Irish Bank under a false impression about the state of the bank's financial condition is deeply disturbing and has to be fully investigated by the authorities," Fianna Fail finance spokesman Michael McGrath said.
Property bubble Anglo Irish was the first Irish bank to seek a government bailout.
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) and the bank was nationalised in 2009.A government rescue package eventually cost Irish taxpayers 30bn euros ($39.4bn; £25bn) and the bank was nationalised in 2009.
The banking crisis led to Ireland having to ask the International Monetary Fund and the European Union for a 85bn euro bailout in 2010.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 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''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.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."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 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.
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."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".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".
Meanwhile, Mr Fitzgerald said: "For the avoidance of doubt, I am not nor have I ever been aware of a strategy or intention on the part of Anglo Irish Bank to mislead the authorities in relation to the forecasted funding position of Anglo Irish Bank."Meanwhile, Mr Fitzgerald said: "For the avoidance of doubt, I am not nor have I ever been aware of a strategy or intention on the part of Anglo Irish Bank to mislead the authorities in relation to the forecasted funding position of Anglo Irish Bank."
Both men pointed out that neither were members of Anglo Irish Bank's executive management board at the time.Both men pointed out that neither were members of Anglo Irish Bank's executive management board at the time.