Central Bank ‘not involved’ in Army at ATM talks, Honohan says

The Governor of the Central Bank Patrick Honohan has said all sorts of ideas were discussed when pressure came on the State’s banking system but having the Army on standby at ATM machines was “not territory the Central Bank is or was involved in”.

His comments came amidst controvsery over remarks made by Taoiseach Enda Kenny in Madrid last week. He told a European People’s Party (EPP) conference that Mr Honohan had told him to prepare to deploy the Army.

“The Governor of the Central Bank in Ireland said to me: ‘It looks like this weekend . . . you’ll have to put [the] Army around the banks and around the ATM machines and introduce capital controls like they had in Cyprus’,” he said.

Mr Kenny’s account was dismissed as a “fairy tale” by Fianna Fáil leader Micheál Martin.

Asked on Wednesday if he had received a specific briefing from the Central Bank to the effect that he might have to deploy the army, Mr Kenny said: “No, not specific, no.”

He said the Government did set up a taskforce comprised of a number of Departments and agencies of which the Department of Finance, the Taoiseach, and the Central Bank were involved.

“They considered all of these contingencies and clearly as was pointed out to you by the Minister for Finance [Michael Noonan] the question of security in the event of a break-up of the euro currency was one that was considered.”

Asked on Thursday if he regretted his Madrid remarks, Mr Kenny said: “I’ve tried to explain that when the taskforce was set up they had to consider all of the contingencies or possible options that might happen because there was a very serious situation arising right across Europe and there was a lot of talk within different Governments and so on that there might be an end to the euro currency per se.”

Asked to explain what had happened, Mr Honohan said the Taoiseach’s recent clarifications “put this story to bed, really. He talked about contingency planning exercises... sure... There was contingency planning, I absolutely agree”.

He added: “There was contingency planning and all sort of ideas were discussed. I wasn’t directly involved in most of those conversations. The Central Bank was. But we also do our own contingency planning that we don’t tell anyone about. But we also participated fully in the Government’s exercise.”

When questioned on whether he told Mr Kenny he needed to have the Army on standby Mr Honohan said he didn’t want to get into conversations he had with him. “I have no doubt that he had officials in other departments talking about contingencies of that type. That’s not territory the central bank is or was involved in. That’s clear now from what he is saying”.

Asked if this planning was related to a specific event Mr Honohan said “we are talking about 2012. There were a lot of concerns about the system, and we were talking about the system, not Ireland”.

Sinn Féin earlier this week accused Mr Kenny of standing in front of his European sister parties and spinning a yarn about the matter and now found himself in a “highly embarrsing” situation.