There is anger in Ireland over revelations that executives at Anglo Irish Bank lied to the Dublin government about how much money it would need as a bailout five years ago.
The Irish Independent newspaper has got hold of tape recordings of top bosses there who laugh about the fact that that the bank has told the government it only needs seven billion euros.
Anglo’s then head of capital markets, John Bowe, says in the recorded phone conversation that he pulled the seven billion euro figure “out of my arse”.
He continued: “The strategy here is you pull them in, you get them to write a big cheque, and they have to support that money… If they saw the enormity of it up front… they might say the cost to tax payers is too high… If it looks big enough to be important, but not too big that it spoils everything, then I think you have a chance (of getting the bailout).”
‘You have to get the money’
The former chief executive of the bank, David Drumm also laughed about “abusing” the state bank guarantee which eventually cost taxpayers 30 billion euros.
Drumm is heard warning his colleagues not to get caught abusing it, but to make sure they get the money: “We won’t do anything blatant, but… we have to get the money in… get the f***ing money in, get it in.”
The conversations seems to show that the bank deliberately misled regulators as it sought help during the financial crisis and the government was lured into helping Anglo Irish through its disastrous guaranteeing of bank deposits.
Arrogance and hubris
Ireland’s deputy prime minister Eamon Gilmore expressed outraged. “I mean the degree of arrogance, the degree of hubris, the degree of couldn’t-care-less-about-the-taxpayer, about the Irish people, that seemed to be part and parcel of the culture of that bank,” he said.
Gilmore also said the revelations could complicate Dublin’s negotiations with the EU over relief on its banking-related debt.
Pressure is now growing for an inquiry into the country’s banking collapse.
In Dublin, the story dominated television and radio news, with almost all national papers splashing the story on their front pages. “How come nobody’s in jail?” read the lead headline in the Irish Sun.
The Irish Independent released more details including Bowe singing the German national anthem and laughing as he discussed the prospect of German money flowing in after the guarantee on deposits.
Many Irish have had their salaries cut by 20 percent or more in order to meet fiscal deficit targets as part of the loan guarantees for the country’s international bailout.
The unemployment rate has trebled since the crisis to 14 percent after the bank-and-land speculation property bubble burst. The 2008 blanket guarantee on bank liabilities led to an 85 billion euro IMF/EU bailout and provoked widespread anger in the country of 4.6 million.
“These guys in the banks lose billions and nothing ever happens,” said Noel Newman, a 78-year-old retiree in Dublin. “On the tape they were laughing, joking. The way they said it was disgusting. Unbelievable.”
Bowe and another executive, consumer banking chief Peter Fitzgerald, said they regretted the conversation but denied any wrongdoing or intention to mislead the central bank.