Sunday 4 December 2016

Banking probe enters last stage with Anglo talks

Emmet Oliver

Published 17/05/2010 | 05:00

The banking inquiry, headed by ex-International Monetary Fund officials Klaus Regling and Max Watson, has started holding meetings with Anglo Irish Bank as the probe enters its final two weeks.

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The report must be submitted to the Government within a fortnight and shortly after that laid before the Oireachtas.

The Irish Independent understands the inquiry has spent considerable time on the role of Anglo Irish in the wider banking sector and the way the lender funded itself during 2008, sometimes via other Irish banks.

The inquiry team has refused to comment on its progress.

"The inquiry has a strictly limited time period and the report will be laid before the House of the Oireachtas," was the only comment made when contacted.

It is not clear if Mr Watson and Mr Regling will interview the bank executives who ran the major institutions in the period before the guarantee scheme was introduced in late September 2008.

However, they are meeting management of the various institutions and lobby groups such as the Irish Banking Federation.

The report, when it is presented to Finance Minister Brian Lenihan, will contain large tracts on how each institution dealt with the financial crisis and whether each bank's conduct exacerbated the impact of the crisis.

Funding

The meetings with Anglo are believed to have focused heavily on the funding of the bank, including the controversial deposits that flowed between Anglo and Irish Life & Permanent in September 2008.

The authors are also looking at the inter-bank relationships Anglo had with German banks and other Irish banks during 2008.

The corporate governance standards at Anglo are also being probed by the Watson/Regling inquiry, although how much work can be done on this subject in such a short time remains to be seen.

The probe only covers the period up to the end of September 2008, at which point the Government announced its intention to introduce a guarantee of all Irish bank liabilities.

The Government has not specified a date as to how far the authors can go back.

A separate report on how the Financial Regulator and the Central Bank dealt with the financial crisis is being done by the governor of the Central Bank Dr Patrick Honohan.

Separately, the chairman designate of Anglo Irish, Alan Dukes, said yesterday the bank would be sending replies to questions posed by the European Commission on the bank's future this week.

Speaking on RTE radio's 'This Week', he said that Anglo should be split into an "asset run-off company" and a new "good" bank.

He said fresh capital for the "good" bank could come from the €10bn the Government had already signalled it was prepared to give to Anglo.

Irish Independent

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