Drumm says bank guarantee not sought
Former Anglo chief executive claims Irish public being ‘misled’ by leaked tapes
David Drumm: “At no time did Anglo Irish Bank request the Central Bank or the Financial Regulator to ask the government to issue a blanket bank guarantee of all Irish banks’ liabilities.” Photograph: Bryan O’Brien
Management at Anglo Irish Bank were “stunned” when the then government issued the blanket bank guarantee of all its liabilities – rather than just protecting its depositors, former chief executive David Drumm has claimed.
Mr Drumm said the bank was not represented at the meeting in Government Buildings on the night of September 28th, 2008 – but insisted it had not asked the government, the Central Bank or the Financial Regulator to issue the guarantee.
“At no time did Anglo Irish Bank request the Central Bank or the Financial Regulator to ask the government to issue a blanket bank guarantee of all Irish banks’ liabilities,” he said in an interview with the Sunday Business Post.
“Anglo’s request was for a secured loan facility of €7 billion. The bank was elated with the news because it was believed that the bank had been saved.
“However, many in the bank were stunned that the government would take what some described at the time as the ‘nuclear option’ of guaranteeing all of the banks’ liabilities instead of just protecting depositors.”
Mr Drumm claims this decision was made “in secret caucus” by the government and was “the root cause” of the crippling liabilities that had been placed upon the shoulders of Irish taxpayers.
Anglo was solvent
The former chief executive also claims Anglo was solvent at the time they asked for liquidity assistance and that management was unaware the bank was about to go bust or that they would need funds beyond the €7 billion they were asking for.
“There was no attempt whatsoever to conceal the extent of the cash flow problems from the Central Bank and the regulator,” he said.
“On the contrary, they were all too intimately aware of just how critical things were.
“The bank’s solvency was not an issue at this time. Rather there was extreme strain on liquidity.
“While I am aware there is much debate on the issues of ‘solvency’ as opposed to ‘liquidity’ during this period, I can only deal with what was happening at that precise time, and these issues were at that time entirely separate.”
Mr Drumm also took the opportunity to apologise for the tone and language used on the tapes.
“I accept that the tone and language used in the tapes is inappropriate and I fully understand why the excerpts published have offended many people,” he said.
“Listening to a recording made almost five years ago at a highly stressful and volatile uncertain time is both embarrassing and a shocking reminder of how much pressure my colleagues and I were under at that time.
“However, there is no excuse for the terrible language or the frivolous tone and I sincerely regret the offence it has caused .”