Wednesday 28 September 2016

NTMA execs locked out of bank guarantee talks despite being there on night - McDonagh

NTMA also locked out of key talks ahead of bank guarantee

Published 22/04/2015 | 13:25

NAMA CEO Brendan McDonagh
NAMA CEO Brendan McDonagh

TOP executives at a key government finance agency were not told of plans to guarantee the banks on the night the move was made until after the decision had been taken and despite their presence in Government buildings that evening.

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Brendan McDonagh, who is a director of the NTMA, the agency that manages the country's debt,told the banking inquiry today: "We were in a room, the door was closed and we could see that something was going on in another room but we didn't know what it was."

Mr McDonagh, who is also chief executive at NAMA, said he and other executives from the NTMA, were in Government buildings that evening in September 2008.

His evidence gives us some detail around what happened on the the night of the bank guarantee. There is no documentary evidence from the night and little other detail.

The cost of the Irish banking crisis and subsequent bailout of institutions was over €60bn.

The controversial blanket guarantee covered AIB, Bank of Ireland, EBS Building Society, Irish Life & Permanent, Anglo Irish Bank and Irish Nationwide.

He added that he got a call at around 8pm to come to Government buildings from Kevin Cardiff, a former secretary general at the Department of Finance who now holds a senior role at the European Court of Auditors, and executives were present from 9pm until 1am.

He also said he was surprised they were not consulted, given that it was such a big decisions. "I was surprised, there was no substantive discussion."

They were told at 1am that the bank guarantee decision had been made but they did not know the decision was coming, Mr McDonagh said.

"Our first view was that it would weigh heavily on the sovereign and on the cost of money," he said.

He added that he had been consulted on one technical aspect of the decision, once it had been made.

He also said the NTMA had been consulted in relation to the general banking crisis.

Earlier he said that in his opinion, the banks were already insolvent on the night of the bank guarantee.

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