Business Anglo Tapes

Wednesday 1 October 2014

Top executives laughed off concerns about abuse of bank guarantee

Paul Williams

Published 25/06/2013 | 06:30

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ANGLO Irish Bank boss David Drumm and his director of treasury John Bowe laughed off concerns about abuse of the Irish bank guarantee scheme.

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In the internal phone call between the two men, recorded on October 2, 2008, they are clearly celebrating the success of the bank guarantee, rushed through the Dail on September 30.

In the telephone conversation, Bowe can even be heard singing bars of the German national anthem for the entertainment of his boss.

The pair then laugh at this impromptu burst of song, which they both find hilarious. They continue their jocular tone as they move on to the subject of banking regulation.

Drumm and Bowe are heard laughing at the concerns expressed to them by a senior regulatory official that the movement of money was causing a rift between Ireland and its EU partners. Drumm scoffed at the warning and declares to his colleague: "So f***in' what. Just take it anyway . . . stick the fingers up."

In this new recording, Drumm jokes to Bowe: "Ah, you're abusing that guarantee. Paying too much in Germany I heard now as well. F***ing ridiculous, John." His senior treasury executive then breaks into song with "Deutschland, Deutschland, Uber Alles" to laughter from Drumm.

As both men continued laughing, Drumm mocks the senior regulatory official who had contacted each of them earlier, mimicking the man in another act of comedy which both find hilarious.

Drumm tells Bowe: "I had (regulatory official) on this morning. I should be recording these calls for the f***ing craic – or at least making notes." (Mimicking official) "'It's f***in' awful what's going on out there. I mean the f***in' Germans are on to us now, David, you know'."

The tape continues with the official being mimicked: 'Look eh, have you seen any, eh, kind of strange money market money coming through on the term? . . . Ya know, ya have to be careful here . . . that people are setting us up.'

Drumm scoffs: "Setting us up by giving us money? I don't mind being set up that way."

Bowe then explained the concerns of the regulator: "What he's suggesting is that UK banks are setting us up by pointing money in our direction and then saying: 'There ya go. That's something that was ours that they've got'."

Drumm replies: "So f***in' what. Just take it anyway . . . stick the fingers up." He continued to dismiss the official's concerns: ". . . I had a pop at him this morning about Northern Rock. I said, 'look they went around with the f***in' Union Jack wrapped tightly around them like a jumpsuit and grabbed all the deposits and where was our f***in' Minister for Finance then?"

Bowe continues laughing as his boss goes on: "So I'm playing a little bit of a game of 'oh Jesus (to the regulatory official), look we don't want you to be under pressure, we're going to do the best we can . . . we won't do anything blatant, but we have to get the money in'."

DISASTROUS

Bowe says: "So I'm just saying to the guys 'look, just be smart . . . don't be stupid, get it (cash) in, don't be overtly pumping it so that somebody can quote you . . . but we want to get the liquidity ratios up'."

Drumm replies: "Correct and right. So ok, so just keep nursing along . . . jack the (interest) rates up. That's what I really meant, get the f***in' money in, get it in."

The disastrous blanket guarantee covered all deposits and borrowings, including bondholders, at the six Irish-owned banks for a period of two years.

In the days after it was introduced, concerns were being raised by the Financial Regulator and European leaders about the abuse of the Irish bank guarantee scheme.

At the same time German Chancellor Angela Merkel, and later the British Chancellor of the Exchequer, expressed their anger to the Irish Government that the guarantee was encouraging eurozone banks to move huge deposits into Irish banks.

Irish Independent

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