Business Banking Inquiry

Sunday 25 February 2018

Banking inquiry: Kevin Cardiff to claim he warned Cowen about broad guarantee

Daniel McConnell

Daniel McConnell

Senior bankers in AIB and Bank of Ireland explicitly sought a broad bank guarantee when they approached the Government for help in 2008, former Department of Finance official Kevin Cardiff will claim at the banking inquiry today.

Mr Cardiff  is expected to claim he warned then Taoiseach Brian Cowen about acceding to their request. He is to say he told Mr Cowen the banks would be laughing at them, were they to introduce a blanket guarantee.

Mr Cardiff was the senior banking official at the Department of Finance on the night of the guarantee, September 29, 2008.

His evidence is expected to contrast sharply with testimony already given to the committee by senior bankers Eugene Sheehy, the former AIB Chief Executive, and Brian Goggin, the former CEO of Bank of Ireland.

Mr Sheehy has previously said AIB had only looked for and expected a four-bank guarantee, with Anglo Irish Bank and Irish Nationwide excluded.

Mr Goggin said it was his input that the system outside of Anglo and Irish Nationwide would need a guarantee for some period of time.

But it is understood that Mr Cardiff will relate that the banks wanted a broader guarantee.

The expected conflict in evidence has already led to calls for Mr Goggin and Mr Sheehy to be recalled to the inquiry.

Several committee members confirmed last night that the details of Mr Cardiff's evidence published yesterday were accurate.

Independent TD Shane Ross said the pair must clarify the anticipated discrepancy in evidence before the inquiry.

Mr Cardiff is expected to say that former Finance Minister Brian Lenihan changed his mind as to what to do after he had a private one-on-one conversation with Mr Cowen.

And his evidence is also expected to contrast sharply with evidence given by former European Central Bank President Jean-Claude Trichet, which he will describe as a fallacy.

The publication of a summary of Mr Cardiff's evidence by a Sunday newspaper yesterday caused deep anger and annoyance among members of the Banking Inquiry, which operates under strict legal parameters.

"The entire inquiry has now been placed at risk, I am furious," said inquiry member and Fine Gael Senator Michael Darcy. "We have been a leak free zone and this is highly annoying," he added.

"This is likely to cause a s*** storm within the committee," said one of his colleagues.

Fianna Fáil senator and inquiry member Marc MacSharry said last night Mr Cardiff's evidence bears out what former Finance Minister Brian Lenihan had told him and his father, former minister Ray MacSharry.

"Bottom line. There is a huge EU angle to our demise. It is unlikely any government in any country would have done any better. That's my only reaction. We are the European whipping boys of this crisis," he said.

The Irish Independent has learned that the committee held a special private meeting to legally clear Mr Cardiff's evidence.

Normally witnesses are requested to keep their evidence to less than 10,000 words but because of his crucial role during the crisis, the committee agreed to make an exception for Mr Cardiff.

A spokesman for the inquiry said last night that the committee will meet on Tuesday in private to discuss how Mr Cardiff's evidence came into the public domain.

For his part, Mr Cardiff said in a statement yesterday he tried to give a report to the inquiry that contained as much relevant information as possible, in an honest and fair manner. He insisted the information "did not come from me". He also said that his evidence must be viewed in its totality and not in a piecemeal fashion.

Mr Cardiff resigned from his post as secretary general of the Department of Finance in 2012 to become Ireland's representative at the European Court of Auditors, amid some controversy over his appointment. The job carries a basic salary of €229,000 a year.

A career civil servant who rose through the ranks

Kevin Cardiff is a career civil servant, joining in 1984. He rose through the ranks and became the head of the Department of Finance's financial services division in 2006, as Ireland's financial crash began to take hold.

On the night of the bank guarantee, Mr Cardiff was head of the department's banking division and was one of a number of key civil servants present on the night. He was then made secretary general of the department by Brian Lenihan in 2010, where he remained until 2012. He became a figure of public controversy after a €3.6bn accountancy error within the department emerged.

Amid the controversy Mr Cardiff became Ireland's representative at the European Court of Auditors on a basic salary of €229,000 a year.

He is set to appear before the Banking Inquiry on Thursday to give evidence.

Irish Independent

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