A former general manager of the Central Bank told the tribunal yesterday he continued to believe that executives of Guinness & Mahon were suitable people to run the bank.
Mr John Coughlan SC, for the tribunal, suggested to Mr Timothy O'Grady Walshe that it would have been open to the Central Bank to take steps to have Mr Des Traynor removed as chief executive of Guinness & Mahon.
Mr O'Grady Walshe said he was never personally convinced that what Mr Traynor was doing was illegal. To say Mr Traynor was not fit to run a bank would have been a serious thing to do, especially as the chairman of Guinness & Mahon was endorsing what was going on.
Mr Coughlan asked if this did not make it all the more serious. Mr O'Grady Walshe said there were people there whom he knew, such as Mr John Guinness, and who he still believed were of the highest integrity.
"The fact that they were there offered a reassurance that what was going on there by Mr Traynor, however much we might dislike it, however much we might question it, wasn't something about which we could make accusations against him," he said.
Mr Coughlan said the Central Bank took a view that Guinness & Mahon, not just Mr Traynor, was engaging in an activity which was unethical and contrary to the national interest. "Are you seriously suggesting in those circumstances that the Central Bank should have taken the view that these people were people appropriate to run the bank in that state," asked Mr Coughlan.
Mr O'Grady Walshe said: "I continue to regard the people on the board of Guinness & Mahon as suitable people to run it." He conceded that if he had known then about the "bank within a bank" the people responsible should have been removed.