Lenihan warned against bank mergers

Former Irish Nationwide chairman Michael Walsh wrote to the late minister for finance, Brian Lenihan, warning him against bank mergers as the financial crisis escalated, according to a letter obtained under the Freedom of Information Act.

In the letter dated November 28, 2008 — three months after the State bank guarantee was introduced — Mr Walsh claimed that Nationwide had a strong capital position and the best option for its staff and members was that it should be allowed continue to operate as an independent financial entity.

“The board believes that the combination of the global credit and liquidity crisis and the undue dependence for such a protracted period at all levels in Ireland on property, make it difficult to develop the non-property elements of the real economy.