The former Fianna Fáil leader spoke for the first time in depth about the “social” meeting and his interactions with developers as he insisted the September 2008 decision to bail out the banks was the “least worst option” and if not taken could have seen Ireland “set back 25 years”.
Speaking at a marathon meeting of the cross-party banking inquiry, the one-time TD confirmed he was brought to the April 2008 function by his late friend and Anglo Irish non-executive director Fintan Drury.
Describing the event as “informal”, he said there were “no big speeches really” and that “I didn’t go with any brief or guide, or didn’t bring any papers or anything like that”.
He said the meeting was “a courtesy thing” on a Thursday evening as “I had never met them during all the time I was minister for finance and they just felt it wouldn’t be right if I hadn’t before I left office”.
The meeting occurred as the economy was slowing and just a month after a stock exchange crisis known in financial circles as the St Patrick’s Day massacre which saw Irish companies lose 24% of shares in a few hours. This included a 15% Anglo Irish share price drop linked to Seán Quinn’s significant property exposure.
However, despite coming just weeks before the meeting with Mr Cowen and a fortnight before he became head of government, the former taoiseach told the banking inquiry the concerns were not discussed at the “social” occasion.
Mr Cowen confirmed he had previously taken a phone call from then Anglo Irish chairman Seán Fitzpatrick to inform him of the Quinn difficulty, but that he said at the time this was “a regulatory matter” not a political issue.
Responding to questions yesterday, Mr Cowen said he is of the view he had “no requests about the guarantee from anyone” at any point leading up to the September 29, 2008, decision.
Last month, former Department of Finance secretary general Kevin Cardiff said a number of bankers and billionaire businessmen were lobbying politicians and senior officials to consider a guarantee at the time.
During an earlier session of the inquiry, Mr Cowen insisted the bank guarantee — while deeply unpopular with the public — was the “least worst option available” to the government as the economy imploded.
He said while it continues to divide opinion “we had one shot” at resolving the crisis and “if we did not get it right Ireland, we were told, would be set back 25 years. We had to go with the best information available to us at the time.”
Mr Cowen said “no decision” had been made before the night of September 29, 2008, when “no option looked good”, meaning what happened was “a case of taking the least worst option available” and that “it was clear we were on our own” in terms of resolving bank problems.
When asked about the subsequent failure to burn senior bondholders, the former taoiseach said while his government wanted to do this, it was specifically told that there would be consequences, saying: “We were left in no doubt that burning senior bondholders would mean no EU/IMF programme, it was one or the other.”
When asked whether he is still in touch with developers today, Mr Cowen said he met with one, Seán Mulyran, four days before his evidence yesterday at a social event.