Opposition parties say Anglo tapes must be investigated

FF ‘disturbed’ by suggestion that taxpayer was falsely lured into bailing out bank

Tue, Jun 25, 2013, 10:39

Suggestions that “the taxpayer was lured into bailing out” Anglo Irish Bank under false pretences should be fully investigated by the authorities, Fianna Fáil has said.

The party’s finance spokesman Michael McGrath was joined today by Sinn Féin and Labour TDs in calling for a full inquiry into the banking crisis following the release of tapes suggesting that Anglo Irish Bank executives knowingly underestimated the scale of the crisis in the bank in 2008 when discussing the need for State support with the Central Bank and then financial regulator.

“We need to get to the full truth about the way that bank was run and the level of knowledge the bank’s executives had about its true financial position in September 2008,” Mr McGrath said.

The recordings suggest Anglo executives misled the authorities about the scale of its liquidity problems for fear they would baulk at providing a significant level of support to the troubled lender following the collapse of Lehman Brothers in September 2008.

The executives in question - John Bowe, who was Anglo’s head of capital markets at the time, and Peter FitzGerald, its director of retail banking - have denied misleading the authorities about the matter.

Sinn Féin said the tapes were “shocking” and revealed “a concerted effort by executives in Anglo Irish Bank to defraud the Irish State”.

The party’s finance spokesman Pearse Doherty said the actions of Anglo Irish Bank had led to “austerity, job losses and hardship across the State”.

“Alarmingly, John Bowe continued to work for Anglo/IBRC right up to last year and Peter Fitzgerald only left in February of this year. That is an indictment on this Government”, Mr Doherty added.

Labour TD Derek Nolan said the release of the recordings made “the urgency of a banking inquiry undeniable”.

“We must understand the culture, thinking and level of knowledge that existed in our banking institutions in the run up to the collapse,” Mr Nolan said. “Such truth will not solve the problem, but it will explain it.”

His Labour colleague Kevin Humphreys said the Irish people deserved to know “the inside story of what was going on in our banking system when Fianna Fáil bailed them out”.

Mr Doherty accused the Government of “foot-dragging” on the matter of a banking inquiry.

“Fine Gael and Labour are taking a hands-off approach to the banks while they pay their executives over the top salaries, increase their interest rates at will and seek increased powers to repossess homes from struggling mortgage holders,” he added.

Minister for Public Expenditure Brendan Howlin recently published legislation that is expected to pave the way for such an inquiry. Taoiseach Enda Kenny today said he hoped the legislation would be passed before the summer Dáil recess.

Mr McGrath said the content of the tapes was “deeply disturbing” and that they should be referred to the Garda and the Office of the Director of Corporate Enforcement, who are investigating goings on at the bank.

“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,” said Mr McGrath.

Fianna Fáil was the senior government party at the time of the bank guarantee and recapitalisation of Anglo Irish Bank, which cost the State more than €29 billion.

“Almost five years on from the banking crisis, it is beyond frustrating for ordinary citizens that no one has yet been held accountable before the law for their role in the crisis,” Mr McGrath said.