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Anglo Irish tapes: Probe into claims scale of crisis covered up | |
(about 1 hour later) | |
Dublin is to open an inquiry into the bailout of Anglo Irish Bank, following release of taped conversations between former executives. | |
The recordings, disclosed by the Irish Independent newspaper, suggest directors may have concealed the full scale of the bank's problems. | |
Prime Minister Enda Kenny said on Tuesday that the public must learn the truth of Anglo Irish's collapse. | |
But executives at the centre of the row denied they misled regulators. | |
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. |
Anglo Irish was the first Irish bank to seek a government bailout. | |
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. |
'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. | |
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. |