Banking inquiry to question Cowen on PwC report

Former taoiseach Brian Cowen and figures from accountants PricewaterhouseCoopers will face questions at the Oireachtas banking inquiry about a PwC report in November 2008, which said Ireland’s banks were adequately capitalised at the time of the State guarantee two months previously.

Mr Cowen, who is due before the inquiry in the coming months, is understood to have written to the inquiry asking which topics and documents it wishes to discuss with him when he appears.

Outgoing PwC chief Rónán Murphy is among 29 individuals the inquiry will call to hearings beginning in April.

According to the Sunday Business Post, the PwC report showed that 22 borrowers owed €25.5 billion to Ireland's banks when they were guaranteed and estimated that the banks might lose €10.6 billion in a worst-case scenario.

The banks were ultimately rescued to the tune of €64 billion in taxpayer funds.

Extraordinary amount

In Austin, Texas for his St Patrick’s Day visit to the US, Taoiseach Enda Kenny was asked about the heavy concentration of large bank loans to a small number of borrowers.

“It seems like an extraordinary amount of money to an extraordinary [sic] small number of individuals,” Mr Kenny replied.

He said the inquiry had a “very specific remit” to investigate the causes of the financial crisis and he had no doubt it would investigate the report on the loans.

Mr Cowen told the Dáil on November 19th, 2008, that the PwC report “confirms that all the institutions reviewed are in excess of regulatory capital requirements” when the guarantee was introduced on September 30th.

“The PwC report demonstrates, under a number of stress scenarios, that capital levels in the covered institutions will remain above regulatory levels in the period to 2011,” he told the Dáil.

The joint board of the Central Bank and the Financial Services Authority of Ireland had submitted the PwC report to the late Brian Lenihan, then minister for finance.

“The Minister has met with the governor of the Central Bank, the Financial Regulator and PricewaterhouseCoopers to discuss the report, which presents an analysis of the capital positions of the six institutions having regard to their loan book,” Mr Cowen said.

The former chiefs of auditors Ernst & Young, Deloitte and KPMG have also been called before the panel. The former KPMG chief, Terence O'Rourke, is a non-executive director of The Irish Times Ltd, publisher of The Irish Times.

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