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JEAN CLAUDE TRICHET has denied that he phoned Brian Lenihan three days before the bank guarantee to insist that the Irish government save its banks at all costs.
The former president of the ECB has told members of the banking inquiry that there was “no message to Brian, no message to the government of Ireland” when asked about remarks the late finance minister made in an RTÉ documentary five years ago.
In an interview for the RTÉ One documentary ‘Freefall’, broadcast in September 2010, Lenihan said:
“Mr [Jean-Claude] Trichet [ECB President] rang me, and hadn’t been able to get through to me. I was at a racecourse in County Kilkenny at a Fianna Fáil event on the Saturday. So I caught up with on Mr Trichet’s message the following day which was that ‘you must save your banks at all costs’.”
Asked about this by Labour senator Susan O’Keeffe today, Trichet said “there was no call to Brian”.
He added that all central bankers across Europe were telling their governments: ‘Don’t do a Lehman Brothers’. He was referring to the catastrophic collapse of the US investment bank in the weeks prior to the Irish bank guarantee.
Trichet earlier said he had a “very close and confident cooperation” with the late finance minister, who he paid tribute to.
The former head of the Frankfurt-based bank was speaking at an IIEA event in the Royal Hospital Kilmainham this afternoon where he faced questions from members of the banking inquiry.
Under questioning from Socialist TD Joe Higgins, Trichet mounted a robust defence of the ECB and its actions in relation to Ireland. He said:
“Sir, we had helped Ireland more than any other country, it seems to me that there is something which is missed here. We were the institution which was helping Ireland much more than any other central bank did for any country.
Earlier, in an hour-long speech, Trichet said the bank guarantee was introduced by the Irish government without any coordination with the European Central Bank or other EU authorities, banking inquiry members have heard.
He said that the ECB was, in fact, critical of some aspects of the blanket guarantee after it was issued on 30 September 2008.
He insisted: “The bank guarantee was introduced by the Irish government without any coordination with the ECB or any other EU partners.”
Trichet has also told the audience that he did not force the Irish government to guarantee and repay all bondholders. He insisted the ECB’s belief then and now is that bailing-in senior bondholders may have had more adverse consequences than benefits.
He told the audience in Kilmainham that the ECB “simply gave advice” on the bondholder issue and insisted the bank did not have the authority to issue instructions to national governments.
He later said that in conversations with Lenihan “there was an overwhelming sentiment that it would be a very bad idea” to burn bondholders.
Had bondholders been burned the cost for Ireland would have been considerably higher, Trichet said, adding that it “would have destroyed credit worthiness”.
Under questioning from Fianna Fáil’s Marc MacSharry, Trichet said he had no memory of Lenihan wanting to burn bondholders.
Trichet also told Fine Gael TD Eoghan Murphy that he never threatened the current government with the withdrawal of ECB liquidity if some bondholders were burned in March 2011.
Trichet is reported to have told Finance Michael Noonan that if junior bondholders were burned “a bomb will go off. It will not go off in Frankfurt, it will go off in Dublin”.
The banker said this was not his style of metaphor and ”totally not in line with relationship I had with your government”.
He said he could not recall any differences between the IMF and the ECB on the bondholder issue in 2010, though admitted “it might have been the case” that their views differed in 2011.
In his earlier speech, while admitting there were major deficiencies in the euro area and a lack of implementation of EU governance rules, Trichet insisted the main cause for the crisis lay with national governments.
He said that systematic, monthly warnings on labour costs were ignored as long as there was no financial crisis.
Asked by inquiry chairman, Ciarán Lynch, as to why no representative of the ECB could appear before the inquiry, Trichet said the legal analysis was that the bank was only accountable to the European Parliament.
He added that he could not speak on behalf of an institution which he is no longer president of.
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Exactly what Dublin needs – people living in the city centre. Hope it goes ahead and quickly.
@Gerry Kelly: How long before it is packed full of illegal immigrants
@Gerry Kelly: quickly isn’t in the planning vocabulary.
@Thomas Sheridan: bet you were at that anti immigrant protest where EVERYONE was decked out in a tracksuit, ballaclava and the latest Nikies. Absolutely dirt
@Thomas Sheridan: not illegal
@Housing Hunger Games: I was nowhere near the protests.
I’m one of the silent majority that opposes all these economic migrants. Even Helen Mackente admits that 90% of immigrants are economic migrants. That would make them illegal in any normal country.
Most of the remaining 10% probably fall into the same category.
Historically, Ireland has always had plenty of traitors, stooges, and gombeens. Great to see this tradition kept alive.
@Thomas Sheridan: is this what they call students these days?
@Thomas Sheridan:
No Thomas, you are part of the 0.6% of people who voted for the far right in a general election only 5 months ago, which was less than half what they got in a nationwide election only a few months earlier.
But you need not worry, the 99.4% will continue to completely ignore you.
@Thomas Sheridan: illegal immigration in ireland is one of the lowest in europe. Which makes sense if you take a moment to think about it. How would anyone practically go about actually entering Ireland illegally? We’re an island.
@Thomas Sheridan: also to be mean and absolutely unhelpful, gosh i wish you guys were silent.
It’s a disgrace that it was vacant for so long. Development of vacant town and city centre properties all over the country would go a long way towards solving the housing crisis and improving our communities.
@Brendan O’Brien: hey hey, so your ban has been lifted? Welcome back to…..what is it you christened your accounts on trustpilot?….. Oh yeah, the KING of trolling
@Brendan O’Brien: Fully agree. But it needs a strategic plan, a mixture of carrot and stick. Renovating old buildings is prohibitively expensive. So a plan that puts pressure on owners to renovate (or demolish and rebuild)l, while providing an attractive incentive if they comply, might work. It’s worked elsewhere, so worth a try here.
@Fran Ken: Agreed. The economist David McWilliams has called for punitively high taxes on property owners who allow their town-centre properties to lie vacant and become derelict. Definitely worth a try.
@Brendan O’Brien: so why didnt you organise the development so, as it is so easy
@Brendan O’Brien: That’s only the stick. It won’t solve the problem. They will simply put their property on the market and no sane person will buy it. Then they can legitimately claim they tried. Thus incentives are also needed. We can learn from countries that made this work: Germany and Japan for example
@Brendan O’Brien: Dunno why we cant gentrify like the rest of Europe, put creatives in there for 2 years, then every bored banker will want in.
IPAS within two years.
@Dave Grant: Clown
@Anthony Curran: Yes you are
It’s actually for an IPAS centre I have heard
@Rian O’Callaghan: Yawn.
@Rian O’Callaghan: Well, you could always check on the CoCo’s online planning page.
@Rian O’Callaghan: hearing voices again.
@Rian O’Callaghan: Nah, a new dole office for you to collect your benefits I was told.
@Rian O’Callaghan: where did you hear that? Arbour Hill?
@Brendan O’Brien: Go to sleep BOB
@Athena: Yep 100% IPAS centre so
@Geraldine Donoghue: Are you get help with that so kid
@Fergus O’Donnell: Contractors working on it.
@Tony: Say you live in those places personally never in one once in my life. You on the other hand.
@Fergus O’Donnell: He heard it on Headbanger-gram along with a lot of other fake news for the ignorant bigots
@Hibernicus: Thanks for telling everyone you support the flood into the country of sub human refugees are you one of them?
Tick. Next. Now can the same be done for the museum of propaganda sitting at Montrose, D4.
Hopefully it gets going asap. We’re all sick and tired looking at derelict buildings lying idle for decades.
Its for rich international students/trust fund kids, those places arent affordable for most Irish students
@colm: like it or not international students fees keep Irish universities solvent; otherwise unis would be a greater burden on the Irish taxpayer
I thought housing the general public would be more important than housing students. Such a prime location. It obviously makes more money housing students. Apparently, some countries have a huge void regarding English language teachers.
@Shane Gallagher: students don’t form part of the general public? Do they suddenly morph when they graduate?
@JoeJoe Kilbride: The apartments are for students only Joe, the non student general public are not given any consideration. Deals have been made, with profit being the main reason, of course. I believe homeless families should be accommodated before students.
@Shane Gallagher: how about students with families, mature students or homeless students. Do these not deserve to be accommodated?
@Shane Gallagher: students living in accommodation means they don’t take over the rental market and leave space for the rest of everyone. More space is always better for everyone.
Only for illegal immigrants. Zero chance any Irish will be housed there.
@Ichabod Crane: Clown
@Anthony Curran: You certainly are
@Ichabod Crane: lots of international students housed in similar developments in the Liberties, North Quays and Smithfield. Do you object to these too?
@Ichabod Crane: Source?
Is this news or an advertisement for future residents.
@Phillip Smyth: a lot of death notices and advertisements issued from here in the past.
Stunning building, classic Irish it’s laid useless for so long! Education is big business so a no brainer.
Wait till the nimbys find out
But surely our left-wing student bodies should volunteer these flats for the homeless?? after all there is a crisis isn’t there?
@Paul: Insert rolling eye emoji here.
King gay Brenny back to make sure comments he doesn’t like are deleted
@John: He really is a dreg to society
@Rian O’Callaghan: agreed
I suppose it’s all down to making money at the end of the day, the top “priority”.
@Shane Gallagher: that’s true. Our current economic system and the biggest political question anyone who wants to do good has to answer is “how do i make doing good profitable?”
Personally I find it exhausting.
have your say