Tuesday 12 December 2017

'If the bank's nationalised, we all get to keep our jobs'

Paul Williams

SENIOR executives at Anglo Irish Bank described the prospect of the bank being nationalised as "fantastic" – so that they could keep their jobs and become civil servants.

The acting director of treasury John Bowe and colleague Peter Fitzgerald appeared delighted at the prospect of the doomed bank being taken over by the State in further recordings from inside Anglo.

Mr Bowe told Mr Fitzgerald that the other Irish banks didn't have the money to buy Anglo – and the best-case scenario was nationalisation.

In a recording of a phone conversation between the two on September 18, 2008, Mr Bowe told Mr Fitzgerald: "I don't think we're an easy sell to anybody . . . and the home interest should be there, except that they don't have the financial standing themselves.

"So, do I think it's going to be possible to offload it (Anglo)? No, I don't. What will it end up being? It could be breaking it up and selling it in individual books, it could be nationalisation, you know. That would be fantastic; if it was nationalisation we'd keep our jobs."

Mr Fitzgerald, who was the director of retail banking, replied: "It would be fantastic wouldn't it?"

Mr Bowe then predicted: "Yeah . . . civil servants . . . but once you do that, then it's a very slow process. It's five years now, it will be five years then."

Their apparent lack of concern about the prospect of nationalisation will spark further anger among taxpayers, following the publication of the first tranche of Anglo recordings in the Irish Independent.

Yesterday we revealed how Mr Bowe laughed and joked as he told Mr Fitzgerald how Anglo was luring the State into giving it billions of euro.

Mr Bowe had been involved in negotiations with the Central Bank. Mr Fitzgerald had not been involved in the negotiations and has confirmed that he was unaware of any strategy or intention to mislead the authorities. Mr Bowe denies that he misled the Central Bank.

Today more extracts of the now infamous phone call can be released. In them, the executives discussed the inquiries being conducted by the Central Bank and Financial Regulator into the state of the country's banks in the days leading up to the bank guarantee.

Mr Bowe revealed that the officials also had the "same conversation" with the Irish Permanent and Irish Nationwide.

He said the Government would have to come to the assistance of the ailing banks. "One playbook is that they decide that they're willing to put their hands in their pockets and support the financial sector or, at least, support the weaker elements of the financial sector."

He also revealed how the bank's CEO David Drumm was planning a series of meetings with government ministers. Mr Fitzgerald worried that the media would get to hear of the meetings. "That will get out," he cautioned.

Mr Fitzgerald then asked "would it not be easier" for the State to "stuff us into Allied (Allied Irish Bank)?"

Mr Bowe replied: "Well I think their playbook is stabilise it (Anglo) and then try and sort it out. And sooner rather than later. So my guess is that within a few weeks they (Central Bank) will be asking Allied to get involved or Bank (Bank of Ireland)."

In a response to another question, Mr Bowe said he didn't think AIB and Bank of Ireland had the capacity to get involved in buying Anglo.

"I don't think they have the financial muscle (or) the standing in the markets to get involved," he said.

They discussed rumours that various banks had done merger deals to avoid collapse. Mr Bowe said: "The market is just rife (with rumours) at the moment. I think the reality is that there is certainly a lot more happening than nothing at all.

"You can take it that in every bank there is a boardroom discussion on where to next."

Mr Fitzgerald later asked Mr Bowe what "message" should be given to the staff at Anglo.

"I'm going to say to people, look, we have got to keep going here.

"Don't worry about things . . . the bank has liquidity and we are in contact with the regulators at the highest levels so don't worry about it, you know.

"The message is, look, keep your heads up, everything is okay, it's a sh***y world out there, every bank is going through the horrors at the moment."

Mr Fitzgerald then laughed: "Yeah, yeah . . . don't bother, take the rest of the day off."

Irish Independent

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