Tapes may hinder bid for better borrowing terms

The contemptuous attitude of Anglo Irish Bank management towards Ireland’s financial partners abroad could threaten the country’s efforts to secure more favourable borrowing terms, Tánaiste Eamon Gilmore has warned.

He was speaking after further taped recordings of phonecalls within the bank in 2008 reveal its then CEO, David Drumm, encouraged breaching the conditions of the bank guarantee that saved Anglo, laughed at the financial regulator’s warnings against such behaviour, and made disrespectful remarks about German and British concerns.

Mr Gilmore said he was shocked and angry at what he had heard on the tapes.

“It makes our work more difficult. Since the election of the Government in 2011, we have been dealing with the consequences of that bank guarantee, trying to clear up the mess, trying to renegotiate the terms of all of the different loan agreements, the promissory note.

“We have had continuing negotiations with the European Central Bank and with our European Union partners and what has come out of those tapes doesn’t make our job any easier. It makes it more difficult.”

The conversation was recorded on Oct 2, 2008, two days after the government rushed through the bank guarantee scheme.

The short-term effect of that was to make Irish banks more attractive to outside investors, causing concern throughout Europe, but particularly in Germany and the UK, that vast cash flows would leave those countries for Ireland.

The regulator was adamant that the guarantee should safeguard existing deposits rather than lure cash from abroad but Mr Drumm is heard on the tape with the bank’s head of capital markets, John Bowe, dismissing those instructions.

“We won’t do anything blatant but we have to get the money in, get the fucking money in, get it in,” he tells Mr Bowe.

In relation to the British concerns, Mr Drumm tells him: “So fucking what? Just take [the money] anyway. Stick the fingers up.”

During the conversation, Mr Drumm mimics in a mocking way an official from the financial regulator’s office and Mr Bowe bursts into singing “Deutschland über alles” to laughter from both men.

They also joke about how fantastic it would be if Anglo was nationalised [this happened three months later] as they would then become civil servants and their jobs would be secure.

Labour TD Arthur Spring, who worked in Anglo from 2002 to 2005, told Radio Kerry yesterday the attitude was typical of what he encountered there during the latter part of his time in the bank.

“You can say whatever you want about the older crew but they seemed to be more principled and they seemed to have a more cautious approach towards banking,” said Mr Spring.

“I wasn’t a happy man with what I saw going on in front of me.

“The overall atmosphere was very macho, bravado driven, and they were a bunch of middle-aged men who thought they were superior to everyone else in society and they particularly had a contempt towards politics.”