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Tuesday 24 April 2018

Cowen 'told Anglo he'd look into cash plea'

Siobhan Creaton

Sean FitzPatrick claims that in Anglo's final months the then Finance Minister Brian Cowen told the bank's top brass he would "look into" their request for him to encourage the National Treasury Management Agency (NTMA) to put some of its millions of cash on deposit at the bank.

It is unclear whether he followed up on this request.

The NTMA deposited €40m with Anglo, despite grave misgivings by its former boss Michael Somers.

Mr Somers deposited €300m with AIB and Bank of Ireland, but he later said he was "hesitant" about placing any more than €40m with Anglo -- the bank that needed it most.

"Initially we were hesitant on putting anything in the bank, but eventually under pressure decided to put a maximum amount of €40m under deposit with them," he said.

The pressure to undertake this transaction came "on the phone" from Anglo according to Mr Somers, through conversations that would go along the lines of "why aren't you putting money on deposit with us?"

There was official wariness about Anglo. On May 21, 2008, Department of Finance officials met with Mr Somers and notes from the meeting state "the NTMA has placed some deposits with the main banks".

Mr Somers said the NTMA had "swallowed hard" when putting €40m on deposit with Anglo Irish on a short-term basis, but added that this was one of the lowest amounts that the agency would have put on deposit with any bank.

"It was only €40m and we reckoned they were a huge outfit and should be good for €40m," he added.

Mr Somers also said that although he had a "gut feeling" that something was amiss at Anglo, he had no knowledge other than what the market had and if he had said something about the bank, "God knows what would have happened to me".

Sexy

"These guys were leading the charge; they were the sexy outfit in Ireland. The two main banks were seen as sort of slumbering giants," he said, adding that Anglo had been growing at 30-40pc a year, that its share price had been going up and that it was being "feted".

When Mr Drumm and Mr FitzPatrick spoke to Mr Cowen, Anglo was desperately trying to raise cash.

The NTMA held large amounts of the money it managed on behalf of the State in cash. At any one time, Mr Somers said, it kept between €5bn and €10bn in cash on deposit with about 100 banks globally.

He said this was "just in case" money and that it had limits on how much of this money it would put in each bank.

Irish Independent

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