Taoiseach monitored situation from Japan

TAOISEACH Brian Cowen said he had been monitoring the Anglo Irish bank situation very closely for the past few days in the lead up to full nationalisation.

Speaking in Tokyo, he said he was in close touch with Finance Minister Brian Lenihan since before Christmas and over the past few days in particular.

Mr Cowen said recent revelations about undisclosed loans to directors in the bank had further undermined confidence in the institution.

Under those circumstances the Government decided that full nationalisation of the bank was the best way of ensuring the bank, which is a critical part of the economy, survived in the long term.

The Taoiseach said the loan scandal involving undisclosed borrowings of up to €129 million to former chairman Sean FitzPatrick and loans to other directors, put the bank under further strain, and confidence in Anglo had been eroded even further.

Against that background the Government decided not to inject €1.5bn into the bank fearing it would not satisfy the markets or restore confidence in the group which has substantial bad debts on its books.

The change in direction did not the imply it was the end of the line for Anglo, however.

“It is a bank of systemic importance, it has a balance sheet worth €100 billion and it’s important in the interest of jobs and commerce that the bank continue as before,” the Taoiseach said.

Mr Cowen was speaking after he has been received by Japan’s Emperor Akihito at The Imperial Palace in Tokyo at the end a trade mission that generated €45m worth of business and delivered 250 jobs.

Despite the irritation of Anglo in the background the Taoiseach said the mission had been a success.

“On a political level, quite apart from trade issues, meeting with Prime Minister Aso yesterday, going through the political issues with him and finishing up with a meeting with his Imperial Majesty was a wonderful final highlight to the trip,” he said.