Anglo Irish Bank was “extremely disingenuous” in several presentations to Government about the strength of its loan book and its capital-raising powers right up until its eventual nationalisation in early 2009, the Department of Finance’s top civil servant has claimed.
The department’s secretary general, Kevin Cardiff, told the Public Accounts Committee today Anglo was trying to minimise the extent of its losses even months after the bank guarantee had been introduced, and when the property crash was in full swing.
He said the department, however, was not at any stage taken in by the bank's “overly optimistic” outlook and had remained sceptical about the bank’s financial footing well before the true scale of its loan losses became apparent.
But Mr Cardiff insisted there was no evidence Anglo was insolvent prior to the Government’s decision to introduce a blanket guarantee, and the advice received, at the time, was that the bank was able to meet its liquidity requirements.
Mr Cardiff today appeared before the committee to answer questions on the advice given to Government prior to the introduction of the guarantee.
Anglo gave a presentation to Government on September 18th claiming that its financial situation was sound and stating that it had “no requirement for external equity capital”.
A week later advisers from Merrill Lynch warned the Government that Anglo could have a €100 million shortfall within four days, September 30th, and €4.9 billion by October 24th.
Labour’s Pat Rabbitte said Anglo’s presentation to the Government in September 2008 “must take the biscuit for chutzpah, sheer hard neck and lying”. Mr Rabbitte said the bank’s presentation about its finances was “outrageous”.
The Irish Times
