ANGLO Irish Bank chiefs made a desperate plea to Bank of Ireland to take it over on the same day the Government was holding crisis talks on the introduction of the blanket guarantee to protect the banking sector.
The date was September 29, 2008, when shares in all the major Irish banks were in free fall. Anglo had substantial repayments due the following day and was unable to meet them.
In a bid to stave off its collapse Anglo’s then chairman, Sean FitzPatrick and chief executive David Drumm, met Bank of Ireland’s then chairman, Richard Burrows and chief executive Brian Goggin and made a dramatic plea to the duo to buy Anglo. They refused and immediately alerted their counterparts in AIB to the fate awaiting Anglo. The top executives of both banks immediately sought a meeting with Government, then in the middle of the crisis talks about the introduction of the general bank guarantee. These revelations emerged in an RTÉ 1 programme called Freefall.
When they met Taoiseach Brian Cowen and Finance Minister Brian Lenihan that evening they spelt out their concerns for Anglo’s future. They suggested the Government should nationalise Anglo immediately.
The Government refused and decided to run with the guarantee that it announced the following morning before the markets opened.
They feared if Anglo was nationalised it would be just a matter of days before it would be forced to take over the two major banks also.
Instead, AIB and Bank of Ireland were instructed to raise between €4bn to €5bn each to fund Anglo for the rest of that week.
The guarantee proved more successful than the Government anticipated and the pressure to take over Anglo receded. That was short-lived as it became clear the bad debts in Anglo had bankrupted the group and it was nationalised in early January 2009.
The disclosure reveals for the first time why AIB and Bank of Ireland ended up in Government Buildings on that fateful night.
Both feared Anglo was on the brink of going under and requested a formal meeting with the Finance Minister and the Taoiseach.
The programme also claims the Government was aware of the precarious state of Anglo because a report into the bank by Merrill Lynch concluded it was looking at a deficit of €500m on September 30, 2008. The unprecedented nature of the guarantee took other countries by surprise. Then British Chancellor Alistair Darling, confessed to being caught off guard by the move.
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