Former bank executives may face ban from Central Bank

Governor Patrick Honohan says legal action is being considered

Central Bank governor Patrick Honohan has said his institution is considering legal action and a permanent career ban for the former bank executives heard on the Anglo tapes.

Germany continues to react to the recordings a week after the first excerpts were released by the Irish Independent.

German finance minister Wolfgang Schäuble told yesterday's Frankfurter Allgemeine Zeitung (FAZ) the tapes made clear how important it was for tough new EU finance regulation to "stay cautious and alert [and] fight such scheming".

“These bankers seem to like themselves in the role of aloof superhumans who have only contempt for their fellow man,” Mr Schäuble was quoted as saying. “Instead it is they who should get our contempt.”


In the newspaper’s Saturday edition Prof Honohan said Dr Merkel’s “contempt” remarks in Brussels “summed up matters very clearly”.

“I can only agree,” he said. “The style, the attitude and the culture reflected in these phone calls are deeply disgusting.”

He said the strategy discussed by Anglo executives on the tapes to play down their bank’s difficulties in dealings with the financial regulator added a “new dimension” to the scandal and that the Central Bank was examining legal action against them.

Possible sanctions, the governor said, included fines and prohibitions on working in the financial sector.

He conceded that the tapes were proof of the poor quality of financial regulation in pre-crisis Ireland.

“It should not have been possible to fool [the regulator] in such a simple and gross way,” he said, but he insisted Ireland had introduced radical regulatory reform since then.

Journalist Paul Williams, who broke the story in the Irish Independent, told the FAZ that the Central Bank was not aware of the contents of the tapes but that "the police had them for four years".

In the same newspaper, Prof Brian Lucey of Trinity College urged continued pressure from abroad on the Anglo tapes, because “Ireland will not investigate the Anglo scandal fully on its own initiative”.

German interest in the Anglo tapes shows no sign of abating, with all main newspapers devoting lengthy articles to the subject in their weekend editions. The bestselling quality daily, the Süddeutsche Zeitung, carried a lengthy news feature about Ireland under the headline "Conned".

It suggested Ireland’s bankers were not the only ones worthy of Angela Merkel’s contempt.

Natural resources
"They are just one part of an elite that shamelessly exploits the island," it wrote, drawing a line from the Anglo tapes to questionable government decision's in Ireland's recent past.

It looks critically at the long-term financial cost of the decision to allow non-Irish fishing boats into Irish territorial waters in exchange for EU subsidies.

However, most attention is devoted to the 1987 law change abolishing the State’s 50 per cent stake in oil finds.

With this law change then energy minister Ray Burke “sold off the island’s future”, it wrote.

“The oil off the Irish coast could be the way out of [its] misery . . . if former energy minister Ray Burke hadn’t changed the law . . . in 1987 to give oil companies 100 per cent of their find with no licence fees,” the newspaper wrote. “Bertie Ahern . . . as finance minister cut the taxes for oil companies in 1992 to 25 per cent.”

The report details the protests around the country arising from oil exploration, and cites the successful protest against oil rigs off the Dalkey coast as an indication of a new protest culture in the country.

However, the strongest reaction to the Anglo tapes has been in the conservative Frankfurter Allgemeine daily.

On Wednesday the paper published an editorial calling for former Anglo executives to be put in a put in a sack with the then Irish government and regulator and “beaten with a club until the screams of pain are unbearable”.

Derek Scally

Derek Scally

Derek Scally is an Irish Times journalist based in Berlin