Business as usual – redux

At Irish Election, P O’Neill tries to make sense of a “bewildering account” by Irish Finance Minister, Brian Lenihan, of what the Irish Government knew about the goings on at Anglo Irish Bank and when. The key point appears to be contained in this Irish Times report

Even though Mr Lenihan’s officials knew about massive ILP deposits in late October, and immediately informed the Financial Regulator, the Minister claimed he was not informed until Anglo was bailed out last month. Auditors from PricewaterhouseCoopers spotted the payments on the bank’s loan books and notified government officials in October. The loans totalled €7 billion.

Brian Lenihan might have spotted it if he’d read the PWC report in full himself. Well, it’s not as if the Irish government tax-payer was about to guarantee the bank’s deposits.. Business as usual, then? [Is it Armageddon yet? – Ed] Update From Miriam Lord in today’s Irish Times.

Two things Lenihan most definitely is: an experienced senior counsel and the current Minister for Finance. He tells an astonished Dáil that his officials never alerted him to a dodgy €7 billion transaction on the books of Anglo Irish, even though they were concerned enough to refer the matter to the financial regulator.

Senior counsel Lenihan never thought to ask them why they were calling in the regulator, and the advisers never thought to tell him why they had been “concerned.” Did they think he couldn’t handle the truth? Opposition deputies didn’t know whether to laugh or cry.

, , , , ,

  • joeCanuck

    More like the Apocalypse?
    Name the four horsemen.
    Would a certain Mr. Murphy from straddling the border be one? Where is his money invested?

    Code word is “green”. Is that the same as republican?

  • George

    Unfortunately, it doesn’t really matter what was said in October, all that matters is what happens now, too many livelihoods are tied up in Anglo-Irish for it to fail.

    I suppose we should be grateful that bonuses are curbed in the deal and this 7 billion is the first Irish exchequer cash put into the banks so far.

    Our profligate neighbours have already shelled out 50 billion just to rescue HBOS.

    Who’s right in all this: nobody knows.

  • Scaramoosh

    Sleight of Hand/Systemic corruption?

    Whilst it does matter what and when the government knew about this; what about Anglo’s shareholders? (….or should we perhaps just dismiss them, in so far as most of them were being created by secret payments from Anglo itself…).

    Shareholders and the market were entitled to know that the bank had received a sum of money of this magnitude.

    And what of Anglo’s internal risk acessors, where were they when all of this was going on?

    We are led to believe that nobody but the big man at the top knew what was going on in this bank, and if this is true, he did a magnicent job at covering things up.

    However, it is fair to say that everyone in the company who was in an executive position at the time of these goings on, should be sacked. Indded, there is a strong case that they should be charged with Breach of Fiduciary Duty!!!

    As well as having a tame and compliant press, it would seem that the Irish do not have any whistle blowers; something that probably can be traced back to the ingrained culture of O’Merta (sic).

  • Dave

    I think we should rename the country ‘Wonderland’ and then rename the government ‘Alice’.

    You can’t solve a debt problem by transferring the debt from the private to the public sector. The debt remains, and the only difference is that good money is then removed from the economy (because taxpayers have considerably less disposable income due to the higher taxes required to repay the debt) and bad business is absolved of it debt and left to continue as a bad business.

    This €7 billion of taxpayers’ money will vanish when the first write-down of asset value by the banks occur. Naturally, those banks have sweet FA intention of writing down their assets until after they get the taxpayers cash. Then – give it about 3 or 4 months – they’ll be back for more cash. By the time their assets are properly written down, the losses will be in the high hundreds of billions.

    Kids, property is virtually worthless and property is what these banks have injected their money into. All of the entrepreneurs you would have relied on to get you out of this don’t exist: they’ll all committed to injecting their disposable income into repaying the mortgages on vacant properties that are worth a fraction of what they paid for them. Your entrepreneurial types – an entire generation – were squandered on a racket created by cheap credit from the ECB.

    There is no magic solution to this, and given the vast amount of debt that banks and other financial institutions have accrued, your government will bankrupt you on worse terms than Iceland if you allow them to make you responsible for the debts of these private businesses. If a bank manager lent money to a business without bothering to read the due diligence report and thereby exposed the bank to a reckless risk (as the inept and risible moron Lenihan has done), we’d all be demanding his resignation. Yet, with Lenihan, we actually trust this ape and the Cowen ape who oversaw and chearled this crisis to handle a situation that presents Ireland with the greatest danger it has ever faced.

    So where is the due diligence of the citizen in all of this? The citizen is satisfied with meaningless rhetoric not supported by facts and figures along the lines of “systemic risk” and “the government is acting on advice from the Regulator/Central Bank” ect as if those phrases are acceptable substitutes for due diligence on the part of the citizen.

    The smartest thing to do at this point is to emigrate. Wonderland indeed.

  • picador

    The smartest thing to do at this point is to emigrate.

    Where to?

    Do the Greens have the ability to bring down this rotten régime? A general election is needed NOW.

  • Mick Fealty

    George,

    Ssshhh… The British taxpayer is also shelling out for the Six Nations through its through the nose bailout of RBS…

    Have to say that if Brian had been Chancellor of the Exchequer in a UK administration, he would have been toast months ago.

  • George

    Mick,
    if the whole country wasn’t paralysed with fear then I think the whole administration would have been toast by now. But that fear is slowly turning to anger so watch this space.

    I read somewhere that Ireland was going through the grieving process for the death of the Celtic Tiger. It does seem quite apposite.

    1. Shock and denial.
    We were in that one for the guts of a year, as it was such a surprise death to many. Numbed disbelief at the size of the losses with people denying the reality by still demanding huge sums for cardboard boxes 50 miles for Dublin.

    2. Pain and Guilt
    The suffering and pain duly followed and unfortunately the government has been looking to escape from it, not with drink and drugs but with borrowing.

    The Guilt has mostly been shown by those who have least reason to be guilty: the poor sods that bought the cardboard boxes and now see their family facing a decade or decades of penury.

    3. Anger and Bargaining
    This is where we are now where people are lashing out and laying unwarranted blame for the death on someone else, for example public servants.

    The government is next up I reckon.

    4. Depression, Reflection, Loneliness
    This is when we will realise the true magnitude of our loss. That could be dangerous as the country will become quite introverted, desperate and isolated.

    5. The upward turn
    So far away can’t even imagine when things will become a little calmer and more organized.

    6. Reconstruction and working through
    That’s when we will start seeking realistic solutions to the problems posed by what has happened.

    7. Acceptance and hope
    Acceptance does not necessarily mean instant happiness and we will never return to the carefree, untroubled existence many of us enjoyed before the death.

  • DavidD

    Good posts from Dave and George.

  • Wilde Rover

    DavidD,

    “Good posts from Dave and George.”

    Agreed.

    Begin threadjack:

    First off, let me begin by saying that this thread, along with previous evidence, proves that Pete Baker is a closet Fenian Bastard.

    I find him guilty of thinking of the collective good of the people of the island upon which he resides above and beyond the lure of the familiar.

    I am appalled that he has betrayed his kith and kin by so brazenly providing a cogent collection of links that might allow the electorate of the republic of Fenian Bastards to reflect upon the dire situation facing them.

    In short, Pete Baker is a Lundy of the worst kind, propping up the mess beneath.

    (That’s every box ticked, right? Now everyone hates Pete. What do I win?)

    End threadjack.

    (From one of the links)

    “Mr Lenihan said he was extensively briefed on the report by his officials and that he read large amounts of it.”

    He read large amounts of it? As opposed to the previous act of political hari kari during the run up to the first Lisbon referendum committed by He Who Has Been Left Carrying the Can?

    Don’t you just hate it when you come across something that cries out for a satirical lash of the tongue and find that the main players have beaten you to the punch by rendering the situation beyond parody?