‘So, [the loan] is bridged, until we can pay you back . . . which is never’
Banker laughs at making repayments and mimics voice of Financial Regulator
By that he meant that if Anglo got into trouble, other Irish banks would not be able to refinance the funding they had from the wholesale markets.
“So I said, ‘Bank of Ireland, their balance sheet is €200 billion, and 45 per cent of that is wholesale, so let’s call that €90 billion. And let’s say that 60 per cent of that is rolling in the next 12 months, so that’s €54 billion – take it that that won’t roll’.”
He suggested a funding difficulty of a similar scale would exist for AIB. “So I said that’s what you’re protecting . . . and so anyway that sort of got everybody’s attention.”
It is at this point in the tape that Bowe begins to recount to Fitzgerald what the financial regulator said when he joined the meeting. Bowe puts on a special voice, mimicking Neary for Fitzgerald’s benefit. The tone reeks of disrespect. “C’mere lads, I just want to have a word with ya . . . yeah Jesus . . . so look, c’mere, have you actually got assets, decent assets . . .”
Listening to the tape at this point, it is hard not to suspect that Bowe believes the Central Bank is all at sea, overwhelmed by what is happening and what it should or shouldn’t do. It does not follow that his assessment was correct, but it may be an interesting insight into attitudes within Anglo in 2008. Bowe makes plain his view that the Central Bank, despite its misgivings, will have to support Anglo as the alternative is too awful to contemplate. “It has to happen,” says Bowe. “It has to happen, because if it doesn’t happen we’re going to hit a wall in the next week.”
The two bankers discuss the fact that the money being sought is to be a “bridging loan”. Bowe: “So, it is bridged, until we can pay you back . . . which is never.” Both men laugh at this point.
At the end of September, 2008, the Cowen Government, during a night of crisis in Government Buildings, with most ministers not in physical attendance, decided to guarantee the deposits of the Irish banks, including Anglo.
Later that year it emerged that Anglo chairman Sean FitzPatrick had undisclosed loans from the bank, and by early 2009 Anglo was nationalised. It, along with Irish Nationwide, was merged into a State-owned body called the Irish Bank Resolution Corporation, which was liquidated earlier this year. Fitzgerald was the State-owned body’s head of corporate affairs up to that point. Bowe was head of corporate development with the IBRC until April of last year.