Two senior NTMA officials revealed the situation as the bank inquiry was told ex-finance minister Brian Lenihan was also “suspicious” of banks’ health.
Then NTMA director and current Nama chair Brendan McDonagh told the cross-party inquiry his group was “always sceptical” about Anglo as it was “just property lending, had rapid growth and we just couldn’t understand the business model”.
He said as a result it was “of the very strong view” both Anglo and Irish Nationwide should be nationalised and that if he was in the room on guarantee night he would have said they were “broken institutions”.
However, instead he and a colleague were left in a side-room as the discussions took place, with their views only expressed through Department of Finance officials who attended the discussions and had previously spoken with them.
The financial expert said due to “liquidity” concerns the NTMA had stopped placing deposits in Irish banks as early as August 2007 and had to be forced by then finance minister Brian Cowen to put a combined €500m in Irish banks in December 2007.
The body refused further “pressure” from the Central Bank and Financial Regulator to increase deposits in September 2008, and tried to take €40m out of Anglo because it felt the taxpayer’s money was “at risk”.
Mr McDonagh said while he attended a September 19, 2008, meeting on a guarantee he understood this to be about protecting deposits only. He said the first suggestion of a blanket guarantee was a Department of Finance e-mail on September 26 which came out of nowhere.
His colleague, then NTMA CEO Michael Somers, later said he was told of the guarantee by text as he was in New York.
He said he felt Anglo “didn’t have any future” and “looked like an accident waiting to happen”.
Dr Somers said he was “flabbergasted” by the level of customer loans involved, and suggested banks were encouraged to lend to each other during 2008 because “they knew where the bodies were buried”.
The comments came after the inquiry was earlier told ex-finance minister Brian Lenihan was “suspicious” of the claimed health of banks before the crash but could not decide if he was “misled” or the victim of system “ineptitude”.
The late TD’s media adviser Cathy Herbert said the then finance minister was strongly in favour of nationalising Anglo but was not “over-ruled”.
Ms Herbert also said Mr Lenihan wanted a partial bailout in November 2010 known as a “preliminary” programme which would have allowed Ireland to keep more control, but that instead Ireland was “rail-roaded” into a deal.
Meanwhile, the inquiry is set to meet ex-Central Bank director Alan Gray, who took part in an infamous Anglo golf game with Brian Cowen, in September after learning the former taoiseach called him on guarantee night.