Monday 20 November 2017

We'll help gardai with probe, says Bank governor

Governor of the Central Bank Dr Patrick Honohan
Pic:Mark Condren
Governor of the Central Bank Dr Patrick Honohan Pic:Mark Condren
Donal O'Donovan

Donal O'Donovan

THE Central Bank is examining whether Anglo Irish Bank "deliberately misrepresented" its position when it sought taxpayer support in 2008, according to the Governor Patrick Honohan.

The tapes were evidence of a culture at the bank that was "absolutely unacceptable", he said.

The head of the Central Bank said he was not aware of the content of the Anglo Tapes before last week's revelations in the Irish Independent.

Evidence from the tapes could lead to criminal investigations, he said in an interview with the German newspaper, 'Frankfurter Allgemeine Zeitung' (FAZ).

Criminal matters are dealt with by the gardai and Director of Public Prosecutions, but it is the responsibility of the Central Bank to communicate with gardai and assist them in investigating suspected wrongdoing.

"We'll certainly not be slow to do that," he said.

Mr Honohan said the tapes were not held for regulatory purposes and so the Central Bank did not have access to them before now.

"We were aware of the garda inquiries and the case that was being built around some matters in relation to Anglo and we knew they had assembled that information," he said.

"We didn't know the content but we knew the investigation was in progress and was in the hand and we weren't feeling: 'Oh, we should be looking for this'," he told the newspaper.

The normally staid FAZ newspaper hit the headlines here last week by famously calling for former Anglo executives, investors and the previous financial regulator to be put in a sack and beaten until the "whimpering becomes unbearable".

As a result of the publication of the tapes, the Central Bank is now examining whether Anglo Irish Bank "deliberately misrepresented" the position of the bank when it sought Central Bank support in 2008, Mr Honohan said.

"This is new in the sense that we knew they were looking for support but we did not know they felt their situation was much worse than they were communicating to the (Central) Bank," he said.

The other thing that comes across from the tapes is not the substance but the style and attitude it conveys, he said.

The tapes are evidence of a "really offensive culture" at the bank, he said.

In his previous report into the banking crisis Mr Honohan called the culture at Anglo "slick and buccaneering" but he said the tapes go much further.

"It's an offensive culture. It's something that was an outlier in the banking system of Ireland but this sort of culture gives rise to other problems, it's not just a question of style."

But he said the tapes were a "blast from the past" and did not reflect the current situation in the banking sector.

If there was an effort to "lowball" Anglo's financial needs in 2008 it did not result in the bank getting a loan at the time, he said.

However, it should not have been possible for a regulated bank to misrepresent its position so badly, he added.

The Central Bank's own regulatory powers were largely civil and limited to fining people or disqualifying them from certain functions, Mr Honohan said.

Irish Independent

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