Anglo Irish nationalised despite cost concerns
The bank was passed into public ownership amid concerns from Fine Gael and Labour that taxpayers still do not know the cost of the takeover.
During yesterday evening’s debate on the Anglo Irish Bank Bill 2009, Finance Minister Brian Lenihan insisted the country’s two other main banks, Bank of Ireland and Allied Irish Bank (AIB), will not be nationalised. He said the Government will go ahead with plans to inject €2 billion of capital into each institution.
“The Government reaffirms that it is proceeding with the planned recapitalisation of Bank of Ireland and Allied Irish Bank on this basis and its firm intention is that both banks remain in private ownership,” Mr Lenihan told the Dáil.
Shares in both banks suffered heavy falls in the past two days, but the minister said: “The position of AIB and Bank of Ireland is fundamentally good.”
He said: “I do not agree with the market assessment that has been taken on those institutions in light of the information placed at my disposal.”
The Bill was passed in the Dáil by 79 votes to 67, and following its passing later in the Seanad was sent to President Mary McAleese who last night signed it into law.
Fine Gael and the Labour Party, who both favoured nationalisation in principle, voted against the Bill because of the lack of clarity surrounding the plan.
Labour finance spokeswoman Joan Burton said the Government is refusing to answer certain questions about the bank.
“Without this information it is impossible for public representatives to make a proper assessment of the investment they are being asked to make on behalf of taxpayers,” she said.
The Government refused to adopt a Labour Party motion to the Bill to put in place an investigation into practices at Anglo Irish Bank, including huge loans to directors which were hidden from shareholders.
Fine Gael’s spokesman on finance, Richard Bruton, said his party had voted against the bill “following the failure of the Government to provide the necessary clarifications and guarantees surrounding key issues such as the level of taxpayers’ exposure under the Government plan, the transparency of the process for the appointment of the board and the absence of any clear strategy for the future of Anglo Irish Bank”.
“This bill is not nationalisation in the public interest. It is simply a bailout for the former patrons of the now defunct Fianna Fáil tent at the Galway Races.”
“I was never in the tent at the Galway Races and never visited the Galway Races, nor did I receive representations from developers or bankers about this particular financial institution.”
“Our banks are now practically valueless without the Government.”
“It will not restore confidence in the Irish banking system and in the economy to rush through legislation dealing with an important issue such as this. We know from past experience — it has happened over and over again — that when one rushes legislation, one often gets it wrong.”
“The members of the House are being asked to agree to the potential nationalisation of what could well prove to be, and has plenty of indicators to suggest it is, a financial cesspit.”
“There is a sense that there are many at the top of the banking system who have behaved in a wholly reckless way, who have betrayed their shareholders [and] the employees who work in the banks and, worse still, who have done great damage to our credibility as a country within which to manage financial institutions.”
“The share price of every Irish bank is still falling because the markets do not believe the reports that are coming out of Ireland.”
“Once upon a time — not very long ago — in this country we had a man called ‘Ansbacher man’. Ansbacher man seems to have had a son called ‘Anglo man’, and the principal and first son of Anglo man is ‘Seánie’ FitzPatrick.”
“The [finance] minister did not tell the House yet what is the cost. What is the likely cost to taxpayers of the nationalisation situation? These are reasonable and fair questions for us to ask and we have not been given answers yet.”
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