Monday 25 September 2017

'Permo payments and the rich are moving money to Germany. . .'

MATT MORAN: 'Somehow, somehow they must have visibility on investment money, excess cash'
MATT MORAN: 'Somehow, somehow they must have visibility on investment money, excess cash'

Gavin Sheridan and Tom Lyons

John Bowe: Permo [Irish Life & Permanent] were on to us, they were short a billion, em, and kind of caught short it sounds like all the corporate stuff [deposits] has left Permo, so the Central Bank is obviously aware of that but they got [€]300[m] on Friday and they got another I think it was [€]850[m] today from us and we just have to see what happens but they're paying it back tomorrow, that's the basis on which we did it. So it feels a bit better Matt I suppose that's the best way of putting it, and in terms of our days, days to disaster you can kind of stretch that, stretch that out y'know?

John Bowe: Permo [Irish Life & Permanent] were on to us, they were short a billion, em, and kind of caught short it sounds like all the corporate stuff [deposits] has left Permo, so the Central Bank is obviously aware of that but they got [€]300[m] on Friday and they got another I think it was [€]850[m] today from us and we just have to see what happens but they're paying it back tomorrow, that's the basis on which we did it. So it feels a bit better Matt I suppose that's the best way of putting it, and in terms of our days, days to disaster you can kind of stretch that, stretch that out y'know?

Matt Moran: [Laughs] Yeah.

Bowe: It doesn't look like it's imminent; it looks like it's further out now, so I would say not a bad day.

The conversation then turns to the broader crisis. The rich are pulling their money out of Ireland and moving it into Germany because they fear Ireland's banks could go bust.

Moran: Two or three things, one I spoke to [a named senior stockbroker in Davy].

Bowe: Oh yea.

Moran: . . . saying to him just did he understand fully what was being said by the government statement and he said it was interesting that they debated it themselves internally and didn't read it as positively as us, so I gave him the inside track on it, I said it was important to get out because of last week and the nervousness around the Irish system. "Yea, look," he said, "We saw very significant money come out of AIB and Bank [of Ireland] on Thursday and Friday and going into German bunds."

Bowe: Okay.

Moran: So they must manage some bank he said it was in the high private client side and he said very significant money.

Bowe: Right, okay.

Moran: . . . and he said like it was quite shocking.

Bowe: Did he give you a figure on that?

Moran: No.

Bowe: What do you think he means by "very significant", could he mean half a billion?

Moran: I don't know to be honest, I don't know and I don't think he would have been set up but it was just. . .

Bowe: But this is private client money?

Moran: Somehow, somehow they must have visibility on investment money, excess cash, and he said "super high net worth money" held in some cash type funds and orders by custodians to move it into bonds.

Bowe: Right okay.

Moran: And into German. . .

Bowe: Okay.

Moran: So he felt that the system on Thursday and Friday was very badly hit and it was all banks.

Bowe: Yea, yea.

Clearly Ireland's super wealthy who had enjoyed the fruits of the boom were not prepared to go down with the ship they had created.

Sunday Independent

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