The Department of Finance kept Anglo Irish Bank in the dark about key events happening with the institution, its former chief executive has claimed.
Mike Aynsley, who was chief executive from late 2009 until its wind-down in 2013, has heavily criticised the department before the Dáil's Banking Inquiry.
He said there was not often “open or transparent dialogue” between the two bodies and the bank uninformed to key influential events unfolding.
Mr Aynsley said this got worse when former secretary general John Moran was appointed in 2011.
The former chief executive said many of the conflicts between the two were easily avoided if Finance had a better understanding of the banks.
Mr Aynsley alleged a senior official in the department told one of his executives to accept a lower bid in the sale of major business.
He said this had emerged in January 2013 in an email exchange between the two bodies.
He said the Department of Finance official urged the bank to accept a certain price in a sale process, which was €100 million less than another party.
In his written statement, he said: “The response from the DoF official was that the lower price would be preferable and that he believed the Minister for Finance (Michael Noonan) would also be supporting of that position.”
The initial bid came from a named Irish business person or his company, and Mr Aynsley said this was the reason for accepting the lower price.
Mr Aynsley went on to claim the Finance official alleged the bank should be “effectively accelerating disposals by entering into bilateral sales arrangements”.
The former chief executive said the bank had vetoed this previously in favour of a more open and transparent process.
This confirmed to Mr Aynsley that the Department did not have sufficient experience levels to add value to the bank’s efforts.
Former Anglo Irish Bank chairman Alan Dukes also criticised the relationship between the bank and the Department of Finance.
Speaking before the Dáil’s banking inquiry, Mr Dukes said their interactions were unnecessarily complicated.
Mr Dukes said this was created by senior officials in the Department who wanted the institution to become a subsidiary of Finance.
He said: “This view, which rests on complete ignorance of the most elementary principles of good governance of a statutory company and regulated entity, dogged dialogue between the bank and the Department from 2010 on.
“It seems that it was also this belief which lay behind the wish expressed by John Moran around June 2010 to be appointed to the board of the bank. I resisted this on the grounds that he would be seriously conflicted.
"I later had it on very high authority that the Central Bank would have regarded such an appointment as 'too close for comfort'."
Mr Dukes, who remained on as chairman when Anglo was nationalised, criticised the wind-down of Anglo Irish Bank, which became known as IBRC, in 2013.
He said: “In sum, it seemed to me that the Department, having conceived the perfectly valid strategy of nationalising Anglo Irish Bank, having then concluded that a wind -down was appropriate and having handled the very difficult issues of recapitalisation and continuing support to very positive effect, decided not to have any trust in the institution it had set up.
“In the process, it wasted a great deal of time and has now created an unnecessary political controversy.”