Gleeson says AIB not told of blanket guarantee

Former chairman of bank thought it would be confined to pillar banks

The former chairman of AIB Dermot Gleeson remains adamant that a bank guarantee covering just the two pillar banks was the only option he discussed with government representatives on the night the blanket guarantee covering all Irish banks was issued in September 2008.

AIB and Bank of Ireland gave different accounts to the Oireachtas banking inquiry about the scale of the guarantee discussed on the fateful night. In his evidence to the inquiry last April, Bank of Ireland chief executive Brian Goggin said the banks were told at 2am on September 30th, 2008, that a blanket guarantee was being provided.

In a statement of clarification to the inquiry dated September 1st last, Mr Gleeson insisted he had no knowledge of any blanket guarantee.

‘Absolutely certain’

“The only option discussed while I was present with the government representatives was a guarantee confined to the pillar banks and excluding the two problem banks. I am absolutely certain that we were not informed of the blanket guarantee before we left Government Buildings,” said Mr Gleeson.

In his letter he referred to the almost contemporaneous notes he made of a conversation he had with the then attorney general, Paul Gallagher.

“Mr Paul Gallagher said to me on a personal basis on the way out of the meeting that I should not assume that the government was committed to any particular course of action in respect of any institution,” he said.

“I interpreted that as a warning that, while I might have gained the impression that the limited guarantee was what was going to happen, that this was something which I should not rely on. I have the clearest recollection of that statement from the attorney general.


“The statement makes no sense save in a context where the AIB representatives had not been informed of the decision which the government ultimately made and of which I became aware the next morning.”

In his statement of clarification he also dealt with another apparent contradiction between the two big banks, saying that in his recollection a slip of paper, upon which there were some words or formulas written (possibly in handwriting), was brought by AIB to the meeting.

He thought it likely, but he couldn’t put it any stronger, that the piece of paper was handed to the official side but he could not recall the details.

“I regret to say that I am unable to say whether the document made any reference to subordinated debt. Unfortunately I do not have a copy of the document – it does not appear to have survived, and I am unable to say precisely what it contained.

“I can only rely here on the almost contemporaneous notes which I made in which I recorded that the formula of words was adopted to a significant extent, in the key passage of the Government communiqué that was subsequently issued,” said Mr Gleeson.

Stephen Collins

Stephen Collins

Stephen Collins is a columnist with and former political editor of The Irish Times