Anglo tapes hint at Central Bank ‘entrapment’- Honohan

Recordings reflect ‘offensive’ and nationally ‘embarrassing’ culture, governor says

Central Bank governor Patrick Honohan who said today the regulatory regime for lenders has changed completely since the banking crisis. Photograph: Eric Luke/The Irish Times

Central Bank governor Patrick Honohan who said today the regulatory regime for lenders has changed completely since the banking crisis. Photograph: Eric Luke/The Irish Times

 

The one new piece of information disclosed in the Anglo tapes was the suggestion that some bankers wanted to “entrap the Central Bank” into a situation where they knew they required a lot more funds than it appeared, the Governor Patrick Honohan has said.

However Prof Honohan said it had “to be examined to see whether that apparent impression on the tapes is in fact correct and whether it is problematic”.

He said: “This is the one element...that to me is new in what has been disclosed...this new element where there is a suggestion that people talking on the tapes see the problem being much worse and....seem to be saying that they would want to draw in the Central Bank and entrap the Central Bank into a situation where they appeared only to require a certain amount of funds but they knew they required a lot more.”

Mr Honohan said apart from this “tiny area” he would not change 99 per cent of the 2010 report into the Irish banking crisis.

Prof Honohan said he may be able to name the financial institutions that were anonymised in his 2010 report.

“In due course” and perhaps in the not too distant future the Central Bank would be able to say it is “not so confidential any more” and attach institutional names to “X, Y and Z” in the report, he told RTÉ Radio’s This Week programme.

“That report gives a lot of answers to the questions that people are now raising,” he said.

Speaking about report on the banking crisis he said people wanted to “see the people involved and what they look like” .

Asked if the public should know who from the Central Bank had been “intimately” involved in regulation from the Central Bank, he said it was “the responsibility of any regulator or Central Bank official to respond to an investigation such as this”.

The Nyberg banking commission, which investigated the bank collapse, chose not to have public hearings but “we could have hearings of that type in public now” he said.

Prof Honohan said the Central Bank had received a number of taped recordings of conversations held by executives in Anglo prior to his appointment in September 2009.

There were a number of issues with “suspicions of criminality” and it received tapes from Anglo Irish Bank on “specific aspects”, he said.

“We did listen to them and we took transcripts and we noted problems and we passed all that material to the gardaí and that is forming part of the Garda investigation,” he said. The tapes were requested by the financial regulator at the time using statutory powers, he added.

The information on the Anglo tapes reflected a culture which was “offensive” and “embarrassing nationally” he said.

There was an attitude of “excessive deference and excessive subservience” to regulated institutions which Mr Honohan said he has tried to change.

The governor added that sometimes regulated entities say “we expect a little more respect from the Central Bank” and he is “a little pleased that that is the tone of the comments” that he gets today.

Mr Honohan was “completely satisfied” with how the approach to regulation and engagement with institutions had been developed with increases in staff and changes in key positions. “We have definitely moved into a new regime,” Mr Honohan said.