David Drumm denies reckless lending at Anglo

Ex-Anglo chief executive David Drumm has claimed his bank did not lend recklessly, was always open to regulation and that financial institutions have been unfairly blamed for the crash.

He is believed to have made the remarks in a written banking inquiry statement which also confirms he asked incoming taoiseach Brian Cowen to tell the NTMA to place State deposits in his bank at an April 2008 Anglo “social” event —contradicting the ex-politician’s evidence.

Mr Drumm — who has been the subject of extradition plans since fleeing to the US months after the bank guarantee — was due to attend next Wednesday.

However, earlier this week he told the inquiry he will not be present, and instead wants to give video-link evidence from the US to avoid legal issues over returning to Ireland — an issue which has split the inquiry.

Mr Drumm, who the Anglo tapes infamously show claimed he picked the guarantee night sum “out me arse”, is understood to have told the inquiry in a written statement he believes banks were disproportionately blamed for the crisis.

While apologising to anyone damaged and accepting in hindsight his bank should have taken a different lending approach, he said Anglo was not a reckless lender.

The banker said Anglo was always open to regulation and this improved during his four years in charge.

He said the firm was solvent on guarantee night despite amounting massive debt and seeking help from rival lenders and the Central Bank that same day, and that the amount of loans subsequently passed on to Nama exaggerated Anglo’s problems — with foreign hedge funds snapping up assets the only winners.

Ultimately, he said Irish people “fooled” ourselves into thinking the Celtic Tiger was the country’s coming of age in Europe, but that this was linked to IMF and ECB suggestions banks had strong fundamentals.

This advice, previous inquiry witnesses have explained, was partially based on banks’ evidence themselves. In his statement, Mr Drumm blamed US de-regulation for the crash.

He has also confirmed he spoke with then finance minister and incoming taoiseach Brian Cowen about specific economic issues during an April 2008 Anglo event which Mr Cowen said did not involve financial conversations as it was a “social” occasion.

Mr Drumm said the duo were placed beside each other and discussed the “financial markets” a month after the infamous St Patrick’s Day Massacre saw Anglo’s share price collapse.

During the Anglo event, Mr Drumm said he asked Mr Cowen to tell the NTMA to place more State deposits in the firm, which Mr Cowen said was already done.

Enda Kenny has said he should attend the inquiry.

Meanwhile, it has emerged an 82-page internal whistle-blower dossier claims a banking inquiry investigator worked for the Central Bank’s solvency committee during the crash, but allegedly did not raise this as a conflict of interest.

The whistle-blower, who has also alleged the Central Bank and Department of Finance were given preferential treatment and officials had dinner with Nama officials days before their appearance, wants an independent investigation.

Most inquiry members believe issues can be resolved by the current senior counsel-led Oireachtas inquiry.