Did IBRC always get the best deals? Hard to know now
Published 04/06/2015 | 02:30
Did IBRC get the best value when it sold assets, was every client treated the same way by the bank? Who knows, who can know?
A former client of the bank, who lost his business to a receiver during the crash, pointed out to me in recent days that at one point in the crisis his lender, IBRC, valued his assets at around €6m.
With debts a multiple of that, he must have appeared to the bank hopelessly underwater.
Receivers were appointed who eventually sold on the same business for closer to €15m. Was the €6m valuation right, or was the sale price?
They both may have been, things were incredibly volatile during the crash.
Valuing business assets, largely what IBRC dealt with, is notoriously tricky at the best of times. The 2010 to 2013 period was far from the best of times in Ireland. For much of it, asset values were in free fall.
Unless there is specific evidence of wrong doing, a judge looking back from 2015, with the hindrance of hindsight, will struggle to retrospectively assess whether any deal done at a point in time represented good, bad or indifferent value for the State.
The nature of IBRC itself complicated things further. Its remit changed radically between its nationalisation and the eventual liquidation - the events likely to bookend the review period. Back in 2010, when the the-Anglo Irish Bank - the bulk of the future IBRC - was in State ownership, the plan was that at least some of the lender had a long-term future as a bank. A change of Government policy meant that, from early 2011, IBRC was in wind-down mode, a substantially different task.
They are some of the reasons why the work of any judge looking back over three years of activity at the former Irish Bank Resolution Corporation looks to be fraught with difficulties, certainly if their remit includes looking at value for taxpayers' money.
It's why the probe is likely to home in on the processes and procedures followed, rather than necessarily on outcomes achieved, when it seeks to assess historic deals.
Process and procedures are also likely to feature in any review of the treatment of customers.
Those of us who go to the bank for a mortgage or car loan are used to fully standard pricing and standardised approvals processes, including the notorious "computer says no" when an application is turned down on an apparently automated basis.
That model simply doesn't apply in commercial lending or indeed in wealth management, where the former Anglo Irish Bank was strongest - or at least biggest.
In that context, and bearing in mind the chaotic effects of the financial crash on borrowers and the bank itself, especially between 2010 and 2012, assessing what might or might be considered normal will also come down to highly subjective criteria.