Anglo in plea to BoI on eve of guarantee
Published 07/09/2010 | 05:00
Anglo Irish Bank made a last-ditch attempt to be taken over by Bank of Ireland on the eve of the blanket banking guarantee, but their approach was rejected, an RTE programme claimed last night.
The approach was made by Anglo chairman Sean FitzPatrick and chief executive David Drumm to Bank of Ireland (BoI) chief executive Brian Goggin.
The programme, called 'Freefall', claims Mr FitzPatrick and Mr Drumm believed they were facing insolvency and mightn't be able to open their doors the next morning.
While their request was rejected, it did force the Bank of Ireland boss to contact the Government and request an urgent meeting, along with AIB.
However, the minutes of this meeting, with Taoiseach Brian Cowen and Finance Minister Brian Lenihan, have never been released.
The RTE programme featured interviews with political figures, including Mr Lenihan, French Finance Minister Christine Lagarde and former British chancellor Alistair Darling.
Rumours of takeovers swirled around Irish banking in September 2008, and some newspapers carried reports on September 9 that Anglo was considering a bid for Irish Nationwide.
Anglo was described as having the "blessing of the Government" for such a transaction.
Crucially, it appears that Mr Goggin wisely avoided the Anglo offer, seeing as the balance sheet of Anglo would have needed huge amounts of fresh capital, far beyond Bank of Ireland's own financial resources.
The Taoiseach yesterday refused to say whether he knew Anglo was insolvent when the blanket guarantee proposal was put before him.
"As I have explained to you, all of these issues were discussed on the occasion in question. The Government made decisions; at the end of the day it was about what was in the best interest of the country at that particular time,'' he said.
Combinations of different banks, before and after the guarantee, were discussed widely within the industry and by government representatives.
At one point, after the guarantee, the idea was floated in the Department of Finance of Irish Life & Permanent (IL&P) being taken over by BoI. IL&P strongly rejected this idea.
Yesterday Fine Gael said the Government had concealed the insolvent nature of Anglo.
"It is clear now that Anglo was insolvent, not just suffering a liquidity problem -- a critical piece of information withheld from the Dail before it forced through the blanket guarantee scheme that included Anglo. This action was against the advice available to the Government at the time," said FG deputy finance spokesman Kieran O'Donnell.