Probe launched after Anglo Irish execs’ calls leaked

by Finbarr Flynn

Bloomberg

A former executive at Anglo Irish Bank Corp. said it would be “fantastic” if the state took over the lender, as “we’d all get to keep our jobs” and sang “Deutschland uber alles” as the bank won German deposits, according to tapes of 2008 conversations released last Wednesday.

John Bowe, ex-head of capital markets, spoke in the conversations with two other executives in September and October 2008, three months before the government took over the bank, the Irish Independent, which released the tapes, said. The recordings indicated the lender planned to seek an initial €7 billion ($9.2 billion) from the central bank because a commitment that size would make the authorities unwilling to let it fail. Bowe, who left the firm in 2012, said the bank probably needed more to avert a collapse.

“I deeply regret that the language and tone I used in these internal bilateral telephone calls was both imprudent and inappropriate,” Bowe said in an emailed statement. “I categorically deny the allegation that I, at any time, misled the central bank or was aware of any strategy to do so.”

The tapes prompted both of the largest opposition political parties to call for an inquiry into the collapse of the financial system, which cost the country its economic sovereignty. Prime Minister Enda Kenny told lawmakers Wednesday in Dublin that the government will hold a parliamentary inquiry into the wider banking crisis as the leaked tapes dominated the Irish media.

“I’m going after” reckless bankers, Kenny told lawmakers. He said that a parliamentary inquiry needs to “get at the truth” of what “led to that culture culminating in a bank guarantee which has been reflected in its condensing, arrogant and dismissive way by extracts from tapes.”

At one point, Bowe sings “Deutschland uber alles,” a line of the German national anthem that isn’t sung anymore after the regime used it to glorify Germany in the 1930s and 1940s, in response to comments by another executive that he is using the state guarantee of the banking system to win funds in Germany.

The executives laugh off concerns by the country’s regulator on how the guarantee was viewed outside Ireland.

Alistair Darling, who was the U.K.’s chancellor of the exchequer at the time of the guarantee, said Ireland’s decision to cover its banks smacked of panic rather than a plan, according to memoirs published in September 2011.

Ireland guaranteed its banks’ deposits and debts on Sept. 30, 2008, in a bid to calm investor concern after banking shares in Dublin fell by more than a quarter the previous day. In all, it cost the state about €30 billion to save the bank, which is in the process of being liquidated after the state took it over in 2009.