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Envy: Green-eyed monster took over pillar banks

THE country's two pillar banks looked on through green-tinted boardroom windows as their once insignificant rival became the go-to bank for big-name developers and businessmen.

Envy among executives and board members in AIB and Bank of Ireland grew into a deep-seated jealousy as Anglo Irish Bank, thanks to their ever-grinning chairman, Sean FitzPatrick, became the dominant commercial lender during the Celtic Tiger years.

Envy, in the biblical sense, is defined as "a sorrow which one entertains at another's well-being because of a view that one's own excellence is in consequence lessened".

This sorrow was reflected in former AIB chairman Michael Buckley's comments in 2003, when he said, "Anglo joined us for breakfast but now they're eating our lunch". Former Bank of Ireland governor, Richard Burrows and his CEO, Brian Goggin shared the opinion that Anglo was eating off their plate in the lending market.

The two banks watched as upstart Seanie and his CEO David Drumm brought their billion-euro clients on all-expenses-paid trips on the Orient Express.

The boards in BoI and AIB, who later included Buckley's replacement Dermot Gleeson and CEO Eugene Sheehy, also grew envious of Irish Nationwide's Michael Fingleton, who was courting Ireland's business and political elite at the time.

"If you can't beat them, join them" became the mantra, and lending policies that had made them the country's pillar banks were disregarded by chairmen and CEOs desperate to share the limelight with Seanie and Fingleton. Their envy led them to ignore the necessary checks and balances needed when lending billions to speculators in a hugely inflated property market. Instead, credit was made easily available and securities were seen as an afterthought.

Peter Nyberg surmised in his banking crisis inquiry that a 'herd mentality' and 'groupthink' took over as board members tried to emulate the success of Anglo and Nationwide.

"As other banks tried to match the profitability of Anglo in particular, their behaviour gradually, and even at times unintentionally, became similar," he said.

Nyberg's report fails to mention that this push to match Anglo's profits was mainly driven by top-ranking bank officials seething with envy at their rival's success.

Sunday Independent