Business Anglo Tapes

Friday 23 February 2018

'We could blow this thing out of water in Europe if we over egg it'

Gavin Sheridan and Tom Lyons

It is now about October 2008. Ireland has taken the disastrous decision to blanket guarantee Anglo Irish Bank as well as its other failed financial institutions. Con Horan, the man in charge of supervising Anglo for the Financial Regulator, is on the telephone to John Bowe, the head of treasury in the bank. In the previous months, Bowe along with Drumm have been going up the walls trying to keep Anglo afloat. Post the guarantee, Anglo's ship steadied temporarily but both men sensed it was beginning to sink again as the market calls its bluff. Horan joined the Central Bank in 1997 and worked his way up to being head of banking supervision. In 2007 he was made prudential director of the newly founded Financial Regulator with responsibility for ensuring the banks behaved. Horan is currently on indefinite secondment from the Central Bank, working for the European Banking Authority. In this conversation, Horan's management style is revealed as he implores Anglo to act "ethically". It also shows the Regulator's friendly stance towards Anglo.

Note: CH is Con Horan. JB is John Bowe. Brackets indicate explanatory insertions by this newspaper.


Con Horan: John, how are you doing? John I was hoping you might come down, can you come down to me for 15 or 20 minutes this afternoon?

John Bowe: I could yeah.

CH: I'll tell you what, I need to talk to you John. I need to just understand your strategy a little bit better. This guarantee, right, the word is coming back to us that you guys and others are bidding very aggressively in the market for funds right.

JB: Definitely not true Con.

CH: Oh, oh, ok. I am just picking this up John, that there is, you know, great stuff, money flowing in, we all need that.

JB: Yeah.

CH: But are we tapping new markets? Are we doing other kind of other areas? Because other banks are kicking up an awful lot and there is a possibility that we could blow this whole thing out of the water at a European level if we over-egg this, you know?

CH: Clearly we'd love to see yous, you know, and have a need for yous to get back in order but I think it has to be done in a way that doesn't make sure that we kill the goose that laid the golden egg here. I think that there is a danger, unless we're clever about this, that we'll bring the whole thing down on top of us.

[Conversation continues before Horan returns to the point that Anglo must not abuse the State guarantee when raising funds.]

CH: And we'll kill this thing if we do it. Very strongly get out there to the guys and make sure that everybody acts ethically and in a proper manner with this guarantee. Clearly we have to run a parallel thing as well, will you just do that and come down around half two and we'll talk about what we might do to organise this a little bit better because we're running fierce risks at the moment.

JB: I'll certainly do that. I'll see you at half two.

CH: Yeah. Ok. Thanks John. Cheers, bye.

Irish Independent

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