Bank ‘has multi-billion euro buffer to protect taxpayer’

FINANCE Minister Brian Lenihan insisted Anglo Irish Bank had a multi-billion euro buffer to protect the taxpayer from its debts as he took sweeping powers over the scandal-hit institution.

The minister will be able to appoint key staff and direct the lender’s actions as emergency legislation to nationalise it was rushed through the Oireachtas. Measures intended to force depositors with more than €20m in the bank to keep the money on account were missing from the final draft after a U-turn.

Sections 18 to 20 provide powers that allow the minister take “swift action” to make necessary changes in the administration of the bank. These “provide for the removal and appointment of directors, officers and employees from their positions with Anglo Irish Bank and its subsidiaries, and the appointment of their replacements. These powers... are subject to regulatory requirements.”

Section 22 provides for the appointment by the minister of an independent assessor to determine the “fair and reasonable aggregate value” of the shares transferred to the Government and the extinguished rights and the consequent amount of compensation, if any, that may be payable”.

Section 25 lays out the criteria which the assessor will use in determining the aggregate value of the transferred shares and Section 31 provides that the assessor’s determination can be appealed to the Irish Financial Services Appeals Tribunal.

Section 32 allows that leave will not be granted for judicial review of the assessor’s determination, unless the application for review raises a substantial issue.

Stressing that Anglo was not just a “developers’ bank” the minister said the institution had loans out to 7,000 customers, of which 5,000 were Irish. It also had retail deposits from 300,000 customers, of which 72,000 were Irish. And he said it had 12,000 corporate deposits, of which 3,500 were Irish.

Labour’s Eamon Gilmore said the Dáil should sit for the full week — as the Government plan would only allow each section of the Bill to be discussed for four minutes.

Labour tried, but failed, to change the legislation to ensure there was a full investigation into how the bank was operated, to remove secrecy provisions in it, and to make the appointment of the assessor and board members more open and accountable.