Wednesday 19 September 2018

Drumm had raised need for help as crisis began

David Drumm Picture: Collins Courts
David Drumm Picture: Collins Courts

Andrew Phelan

Former Anglo CEO David Drumm wrote to the bank's senior executives to ask for their thoughts on how Irish banks could "help each other" as the financial crisis deepened in 2008, a jury has heard.

Mr Drumm (51) was passing on a request from the governor of the Central Bank a day before Anglo's own share value plummeted in what was known as the 2008 'St Patrick's Day Massacre'.

Mr Drumm's email was sent to Anglo's head of capital markets John Bowe and forwarded to several other senior executives.

Dublin Circuit Criminal Court heard the bank tried to secure more deposits to improve its cash flow as international banking went into "meltdown".

Then director of treasury at Anglo Matt Cullen was giving evidence in the trial of Mr Drumm (pictured), who denies taking part in a conspiracy to defraud in 2008.

Mr Drumm is charged with conspiring to defraud Anglo investors in 2008 by dishonestly creating the impression that the bank's deposits that year were €7.2bn larger than they really were. He is alleged to have conspired with former Anglo officials Willie McAteer and John Bowe, as well as Irish Life and Permanent's then-CEO Denis Casey and others.

Mr Drumm is also charged with false accounting, by providing misleading information to the market on December 3, 2008. He has pleaded not guilty to both charges.

The court has heard that money circulated between Anglo and Irish Life and Permanent (ILP), through Irish Life Assurance (ILA), a company owned by ILP.

In an email on March 16, 2008, Mr Drumm asked Mr Bowe: "Will you put some thought into what the Governor asked us, to look at how the Irish banks could help each other?"

There were 50 initiatives with different banks to increase corporate funding. But by September a lot of these initiatives had fallen away and the financial market "was going into meltdown", Mr Cullen said.

On September 29, the day before the Government's bank guarantee, Mr Cullen delivered a letter to the Central Bank seeking €1.4bn in emergency funding.

The trial continues.

Irish Independent

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