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Updated 1.49pm
THE FORMER CHAIR of AIB has told the banking inquiry that the bank lent too much to developers during the boom and said he was sorry for the mistakes made.
Dermot Gleeson also revealed that AIB and Bank of Ireland favoured a four-bank guarantee, that would not involve stricken Anglo Irish Bank and Irish Nationwide. This was an approach then-finance minister Brian Lenihan favoured, he claimed.
In his opening statement, Gleeson said AIB lent too much to individual developers and said that the bank relied excessively on risk models that proved to be inadequate.
Gleeson, a former attorney general, expressed “sincere regret” for his role in events and reiterated his apology made at the AIB AGM in 2009, the same year he stepped down from the bank’s board.
He said he agreed with the “broad thrust” of the subsequent reports into the crisis that have been published in recent years. Later in the inquiry, he said:
I was the chairman, the buck stopped with me. I did my level best, but it wasn’t enough. I can never get away from that.
Gleeson said the OECD, the EU, the Central Bank, the great majority of economists – but not all of them – and the board of AIB all favoured the consensus of a ‘soft landing’ as the downturn began.
“The consensus was wrong,” he said.
Gleeson said that on 29 September 2008, he received a phone call from the then-chairman of Anglo, Seán FitzPatrick, asking for a meeting, but the meeting did not happen.
He said in negotiations with government officials both AIB and Bank of Ireland had asked that Anglo and Irish Nationwide be “taken down” and that the four remaining banks be issued with a guarantee.
Gleeson later noted that Lenihan, who he was friendly with, had told him in conversation some months later that he had also favoured this approach.
“I didn’t find it surprising that there would have been different views,” Gleeson said, while not being drawn on whether Lenihan was overruled.
He said that he met the then-financial regulator Patrick Neary in corridor in Government Buildings on the night of the guarantee and had “a personal chat with him” but there was “nothing about the issues”.
Gleeson said that AIB representatives were not present in the room when the decision to issue a blanket guarantee was made and said he was not aware of this having happened when he left Government Buildings in the early hours of 30 September.
He said he became aware through the media early the next morning.
In exchanges with Pearse Doherty and committee chair Ciaran Lynch, Gleeson referred to a “slip of paper” that sketched out “the scope of the guarantee” and “the sort of guarantee needed to reassure depositors”.
Gleeson said the note was brought to the meeting with government officials on 29/30 September. Lynch noted that this “document” was not in AIB’s records. Gleeson said he believed it was left at the meeting.
Gleeson earlier said that AIB’s lending practices were impacted by Anglo’s.
He said that commentators repeatedly said that Anglo was the best bank and people asked: “Why can’t you be more like Anglo?”
I don’t think we were mirroring their [Anglo's] practice, but we were staying with them longer than we should have done.
Gleeson was also asked why €270 million in dividends were paid out by AIB on 26 September 2008 – four days before the guarantee.
He said that the decision had been taken the previous June, but that it was a mistake.
Yesterday, NAMA chief executive Brendan McDonagh revealed how he and other officials form the National Treasury Management Agency were kept outside of the room where negotiations were taking place.
He recalled his surprise at being informed at 1am on 30 September that the government had decided to guarantee all assets and liabilities of the six main financial institutions.
Gleeson was asked if he was surprised that NTMA officials were not consulted on the night of the guarantee. He responded: ”Nothing surprise me anymore.”
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The poor man I hope he makes a speedy recovery & gets the help he needs!
No doubt an addict stumbling across the road from merchants quay treatment centre. I’m forced to weave around one out of it on the road at least once a week there early in the morning each week. Hope he’s ok.
@thegreatdefector: still a human being.
@thegreatdefector: why do you have to contribute to the already existing stigma against addicts, it could of been anyone!!in any situation! from any walk of life, even someone who might of had to much to drink and fell. Be nice you pr*ck
@thegreatdefector: no you don’t hope he is ok , all you seem to care about is the inconvenience of weaving around some person in the morning once a week
@Patricia Mcnamara: well said Patricia. Because someone is an addict means they are suffering with a dreadful illness not that they are less human or expendable. There before the grace of God go I…. It’s someone’s son/daughter brother/sister.
@Trevor croft: Imploring someone to be nice while calling him a p*ick. Ironic that.
@thegreatdefector: Merchants quay treatment centre is open at 7am?
@JC: sorry jesus your right, I could of chose my words differently! Be nice you gobshi#te
@thegreatdefector: no doubt? How many of
‘ them’ have you heard of that actually fell in? In case you haven’t seen it, that bridge would need to be climbed or the person would have to have been ‘helped’ over it.The people who use that service have enough to struggle with in their daily lives without broad sweeping assumptions about them being thrown about as if they’re less than human.
@thegreatdefector: it’s the 65 thumbs up to your comment that’s frightening. May be maybe not a junkie but he is someones son.
@Thomas Claffey: I personally don’t like that word but it’s your mouth (or thumb in this instance) so fire away. My youngest brother, who died earlier this year, was an addict. You wouldn’t have been allowed to call him that in front of me without a dressing down I can tell you but your sentiment is correct. Everyone is someone’s son or daughter and entitled to basic respect. Will you please think about using that word to describe people? It’s hurtful to them and to those who actually know and care about them.
@Daff. Myers: sorry for your loss Daff. It’s a truly terrible illness. I hope he passed peacefully and is free of that demon now.
@Daff. Myers: it is what it is
@Daff. Myers: I am sorry for your loss. but I have walked in them shoes and was called that name .I was hooked on junk. Iam not someone that has not gone through it.
@Thomas Claffey: that makes it even more amazing you would use language that makes you appear to have no empathy. Why not use your life experience to educate and help? You’d be best qualified if you’ve lived through that and come out the other side.
@Mick Murphy: thanks Mick. We know where he is now and that nobody will ever hurt him again. And yes, at least he is free of the demon.
A sign of the times
Sad.. a sign of the times
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