Tuesday 12 December 2017

Casey talked of 'local support' to reduce ECB loans

Joe Brennan and Emmet Oliver

Former chief executive Denis Casey told top financial watchdog figures on October 2008 that IL&P "might need some local support" to bring down its heavy reliance on European Central Bank (ECB) funds at the end of that year, minutes of their meeting show.

IL&P disclosed last February, in the fallout over its €7.5bn of deposits with Anglo Irish Bank the previous September, it had brought down its own ECB borrowings in June 2008 by pledging €3.3bn of mortgage assets with Anglo Irish Bank in return for inter-bank deposits.

Correspondence between solicitors Matheson Ormsby Prentice and Anglo chairman Donal O'Connor in January last year highlighted that IL&P had €3bn of assets pledged with Anglo on December 17 in return of inter-bank deposits.

It said that the so-called 'reverse repurchase transaction' began seven days earlier, and that it was understood the Central Bank had prior knowledge of this.

But the correspondence noted the Central Bank had an apparent change of view as it called on December 22 for the transaction to be unwound. It had been cut back to zero by the year end.

Irish Independent

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