Bank chiefs to study Allfirst report

Officials at AIB bank were today being presented with a report into the €746m fraud at its American subsidiary Allfirst.

Former bank currency controller Eugene Ludwig is in Dublin to brief the boards of AIB and Allfirst on the details of the fraud and to make his recommendations.

Reports have claimed that the document will say group chief executive Michael Buckley learned of potentially high-volume foreign exchange dealing in May 2001, despite previously saying he knew nothing about it the problems until February 4, days before the fraud was exposed publicly.

It is reported that Mr Ludwig will state that Mr Buckley was alerted by a contact in the currency markets about the size of Allfirst’s trading nine months earlier.

It was a ‘‘general comment’’ and Mr Rusnak’s name was not mentioned specifically in the tip off, it was said.

The Ludwig report is said to disclose that in May 2001, following the alert, Mr Buckley, then chief executive designate, quizzed the head of the treasury operation at Allfirst, David Cronin, on the warnings.

Mr Cronin was said to have told Mr Buckley that trading volumes at Allfirst were not unusual but their concentration with two banks may have made them seem larger than they actually were.

Mr Cronin has been suspended on full pay pending the outcome of the investigation.

AIB maintains that Mr Buckley had no idea of the scale of the problem until February 4.