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BRIAN COWEN HAS said he “underestimated the impact” of the International Monetary Fund’s (IMF) visit to Ireland in November 2010.
Speaking to the banking inquiry this morning, he recalled:
“Standard & Poor’s, the credit rating agency, gave a very unfavourable rating assessment for Ireland in August 2010 and Irish Government bond yields increased very sharply. At the end of September 2010, the Government announced its intention to withdraw from the markets as a tactical move since we were fully funded until mid-2011.”
Cowen went on to say he “underestimated the impact of the IMF coming to town element which immediately sent a message that this was now a done deal rather than a genuine continuation of existing discussions up to then”.
He said this perception was further reinforced when the Central Bank Governor Patrick Honohan gave his now infamous Morning Ireland interview where he revealed Ireland was entering a bailout.
This development showed the Government in a bad light because of the interpretation given to events that we were keeping what was going on away from people. In fact we were trying to put ourselves in the best position we could, before formally
requesting assistance.
“We wanted to know exactly what we were getting into before we agreed to formally apply for any programme,” Cowen said.
Earlier, he noted that then Finance Minister Brian Lenihan was not present when the decision was made at the bank guarantee meeting to not burn bondholders.
“Minister Lenihan had at this stage gone home because he had a very busy schedule to fulfil from early the next morning. He told me some time afterwards that he was not present in the room when the dated subordinated debt issue was decided upon.”
The former Taoiseach said it is important to point out that senior bondholders in Irish financial institutions include the proceeds of Irish pension funds, large credit union deposits and deposits from religious and charitable trusts.
“While no one would suggest that those funds should be at risk, in law all holders of bonds of the same category whether foreign or domestic have to be treated the same. In other words you cannot protect some senior bondholders and not others.”
He didn’t overrule Lenihan
Cowen denied overruling Lenihan at the meeting. The latter had wanted to nationalise Anglo and extend a bank guarantee to the other banks. However, he later changed his mind.
He noted that nationalisation “doesn’t solve all the problems” as it would have meant the State permanently taking on Anglo’s liabilities. He said the conversation between the two men wasn’t in any way “adversarial or confrontational”.
Golf with Seán Fitzpatrick
Sinn Féin’s Pearse Doherty asked Cowen about a golf trip he went on with with former Anglo director Fintan Drury and former Anglo chairman Seán FitzPatrick at Druids Glen in Co Wicklow in July 2008.
Cowen said he contacted Drury about setting up a meeting to discuss the economy before he went on holidays, recalling telling him: “I haven’t had a break in a long time.”
Cowen said Drury set up an “informal” golf outing with FitzPatrick and others and he had “no problem” with this. He noted that some people have drawn “conspiracy theories” from the meeting, but said they didn’t discuss Anglo.
“As God as my witness … I wasn’t discussing banking, I was discussing the economy,” he said.
The ‘least worst’ option
Cowen said the bank guarantee, which was decided as the course of action at a late-night meeting on 29 September 2008, Cowen said the situation “has to be viewed in the context of what the situation was on that night and what was at stake”.
Irish banks, as was the case everywhere else, were finding it hard to access cash to meet day-to-day operational requirements. There was huge turbulence not only in the money markets but in the wider stock market which was reinforcing the diminishing confidence within the financial system.
“We knew over the weekend of 27/28 September that Anglo and Irish Life & Permanent were going to find it hard to get through the following week in terms of having cash to conduct their day-to-day business.”
Cowen noted that John Hurley, then Central Bank governor, told the meeting Anglo Irish Bank lost €2 billion in deposits that day, and expected a similar situation the following day.
“The issue was going to have to be addressed immediately,” he said.
Cowen said the situation in the country at this time was so volatile it was like the great crash of Wall Street in 1929.
He recalled that Kevin Cardiff, assistant secretary of the Department of Finance being “of the view that a nationalisation of Anglo and a guarantee for the rest of the banks was his preference”.
“He accepted it was a judgment call and there was no single right answer to our dilemma.”
Eventually I put it to the table that it seemed to me that a full guarantee option provided the best prospects of addressing the urgent liquidity problem and of sending a clear message that Ireland was standing behind the financial system which would be understood by the markets.
We hadn’t much room to manoeuvre. It would have the benefit of being an impactful measure which could solve the immediate and pressing problem.
Cowen added that the position of the ECB (of which Hurley was a member of the governing council) was that “no bank was to be allowed fail because of the contagion effects that could ensue in the euro area”.
“In other words there could be no Lehman Brothers-type event in the euro area.”
Originally published: 9.53am
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Cmon now stop lads. He is a great man. It just makes complete sense to cut the allowance of struggling lone parents (to get them back to work haha) while we raise the already fat pensions of the likes of him.
Golfing with seanie fitz the week before the guarantee and they didn’t discuss the bank….. WHT THE FCUK NOT?
Conveniently cowen decided to save the bank. Maybe it was the wager they played the round for!!!
Four hours around a golf course, I wonder how many of his constituents struggling to pay mortgages or look after sick relatives got that sort of ear time with the Taoiseach?
There may be no law against it but it’s shameful how friendly the top bankers and politicians were/are. These cosy relationships have to be addressed. It gives the two fingers to democracy.
they were mad to spend some time in his company because hes a fantastic golfer, a great man to tell a yarn and sing a ballad and they had nothing else on their mind at that time except having a bit of crack
Gift Grub did it perfectly. Priceless.
What a joke this whole thing is. Thanks to this government cowen will get a nice little rise in his pension. They are just laughing in everyone’s face.
FG always cover for FF just so that things remain the same.
There has been enough material in the public domain to have many FF ex-leaders and ex-Ministers charged with corruption and white collar crimes.
They never will push for that and any Guard who did would find he was demoted every time FG gets in to power.
Dukes has been mentioned in the same sentence as ‘criminality’ by Noonan. The way things look with NAMA/IRBC it is becoming increasingly difficult not to draw certain conclusions as to what they are actually about.
Yup..and while this guy gets an extra €2000 a year for butchering the country, parents are going into debt to give their kids an education. This needs to stop.. and this is why the left is on the rise. Fg/FF just do not care about ordinary people..full stop.
Totally agree with you but we have a lot of people in this country that are brainwashed and will vote for FF/FG
The Irish state whether governed by FF or FG has always primarily protected and served the interests of domestic and foreign capital over the welfare of the majority of citizens. This was demonstrated very starkly in the bank collapse and bailout implemented by FF and fully supported and eagerly enforced by FG since entering government.
FG are not as corrupt as FF but they are still corrupt.
@Pontius Pilatus How can you defend the indefensible? FG made the mess worse! They deliberately looked after the rich at the expense of the poor. They had choices and they choose badly.
@ Pontius Pilatus While I agree with your point please remember that FG lied to the electorate. No one wanted to vote FF. However Kenny and Co took it as an endorsement of FG which it definitely wasn’t. He then started on the path of Fascism and continues to this day. We need to get rid of them NOW. Most of the damage has been done but although I’m not a SF supporter I feel that they cannot do any worse than FF and FG. We need different thinking as the old corrupt way of Politics and Politicians has to stop.
How, exactly? I’m not aligned with any political party but want to know how they made it worse. Austerity needed to happen to pull us from our knees as a country.
The people actually out working every day, paying taxes, actually paying their mortgages and debts (as opposed as CHOOSING not to do, which many are doing), while paying huge portions of their salaries to leave their children with strangers for 11 hours are being squeezed the most. Working like dogs to have nothing left at the end of the month. Only having one child as they can’t afford any more, in good conscience. They are the poor, not those pushing state sponsored bugaboos around in the middle of the day with 20 benson in hand and a free house
Brian Cowen. Spends loads of one-on-one time with bankers, doesn’t talk about banking once. Sure, sounds believable.
That’s still up for question Pontius. Enda Kenny was asked this morning , how come government have no problems putting through legislation when it comes to taking money from the less well off and seem to have a major problem when it involves the rich. The example given was Michael fingelton and his €1 million pension. The taoiseachs answer was ? He didn’t even answer the question. It’s quite obvious this government are only interested in protecting the elite at the expense of us all. So it makes you wonder are the answer for the majority and I think you will find the answer is no.
Are they , the answer for the majority.
I agree with you Pontius on the independents. I too will be seeing who will be running in my area. I suppose it’s the argument on whether we would be worse off right now if any other party had been elected is where I do wonder. Because for an awful lot of people under this government they are worse off. I don’t just mean financially . I am talking about a wide range of things. From health to schools, roads, services , the list goes on. Ff broke this country financially and fg, labour broke it socially.
their policies made it worse for people like you,they chose to protect the rich and big corpos,so middle and lower paid people have to pay for it.take 30 euro a week of someone on 350 a week has a big effect on their life,take it off someone on 700 a week it does not effect their standard of living. this is where enda and co made it worse.
well Pontius Pilatus Please remember to give your 2nd, 3rd and so on preferences to Independents as well. The main parties think that they are going to walk this election with surplus votes. Lets give them something to think about in the fortcoming election.
Some people can’t think outside the box
This is what makes me sick.Its been going on since the formation of the state, ff blames fg, fg blames ff.
Can people not see it there is no difference between the 2.They are both right wing who have no interest in the people of this country.I mean who is benifiting from this pension increase,yes you guessed it ex ff,fg heads who have screwed the country.FF are supposed to be the opposition but you wont hear any protest from them because they will want the same pension entitlements to.These obscene pensions have got to stop.
It was every one else’s fault. I was only the Taoiseach.
I was on pittance of salary, a miserly pension and I had to interrupt my golf with Seanie, my coffee chats with Sean Dunne and my corporate hospitality entertainment to deal occasionally with affairs of state.
I’m a very important person and I did the Irish State immense service.
You are all a bunch of ingrates. I looked after youse all and now you turn on me.
I’ll only put the tip in…!
He said he had no banker friends so he wasn’t friends with seanie, and he wasn’t discussing business with seanie so why exactly was he golfing with him
probably because those bring interviewed wrote them!#
“Your father did business with Hyman Roth, he respected Hyman Roth… but he never *trusted* Hyman Roth”
The personification of Biffo!
Like a monkey examining a remote control detonator.
That headline seriously needs to be addressed:
“Brian Cowen Gives Lip Service at Banking Inquiry” is far more accurate, given that that is the summation of this toothless, pointless farce.
I originally ‘read your comment as toothless pointless face, but hey. that makes sense too!
Minister for finance wasn’t there when Ireland made its biggest financial decision even lol only in Ireland , how many ministers and TDs were bondholders ??
Neither of the two Brians were there apparently. This is just not believable I’m afraid, and definitely not good enough. Might be easier just to name who was there, that’d be interesting.
We don’t know if that is true or not.
Neither of the 2 Brians are people that should be trusted.
Would he take a lie detecter test ??
Oh yeah expect the truth, the whole truth and nothing but the truth
Sure he’s never lied before has he?
Well, not coherently anyway.
You have to understand the truth before you can tell a lie. Cowan has admitted that he did not know what was happening because “nobody told me”. You just could not make this stuff up.
I love the way Cowen never factors in that Fianna Fáil were in Government for the ten years leading to our economic meltdown…
very hard to believe as they(FF) denied that the imf were in town even though it was reported across the world . they also said it was nt a bailout
Gangsters. Al Capone hasn’t a patch on these guys.
Should be a crest over the Dail.
“Corruptius in extremis” Brian Cowen/ Mayor Quimby. Rings hands and fakes caring. Moral bankrupt fiddling f#cks!
I’m not an accountant *snort
Should read :Brian Cowen taking the urine at the banking inquiry.
What a charade politicians interviewing ex politicians who are on big fat pensions who cannot be deducted and ordinary worker have their pensions raided what joke !
more cuts on top of lone parents, the fair deal scheme for our oldest and most vulnerable citizens who after working and looking after us as children got a lovely surprise in the form of a deduction in the megere amount of money thay get for themselves, all part of the hard choices we all have to make!!! I ghess the books have to be balanced, after all where will the extra cash come from to pay for briens pay rise. I know let’s take it off lone parents and the old and infirm.
“It wasn’t me”
“I don’t recall”
“I wasn’t present”
“I didn’t make that decision”
“I may have been drunk that night”
Put him on jeremy kyle show he get the truth out of him .but then again the lie detector machime may explode.
The whole affair could have been avoided.
By failing to prepare, they prepared to fail.
“under the weather” on national radio, golfing with one of banking Irelands greatest saboteurs. laughing all the way to the bank
Lenihan was’nt there
Were any of them really there apart from body?
Ah well if god is his witness he must be telling truth. Anybody that would use god as their witness surely wouldn’t mislead us now, would they ?
Biffo & co should be interviewed by people who have not got a political point scoring agenda.
He goes playing golf to ‘discuss the economy’ at a time Ireland inc is bankrupt & it just so happens Mr seany fitz makes up the 4 ball & he actually states God as his witness. Come on lads, stop pussyfooting with this guy.
It must be great as a dodgy banker with vested interests to have the fecking taoiseach calling you to ask your opinion on the economy
What a pillock
Your use of the word pillock has brightened my day, I’ve not heard it in a while and will make a point to use it in the near future. It’s also very appropriate for the the man of the moment.
It may have been However not him or any other politician have suffered they all claim to know people but not him and now how will he empathise with the people who lost their homes jobs emigration etc a substantial pension increase spare me
every one of them are liars and thieves.
ah here, get this man a lie detector test and bring charlie and bertie back in and finally cut their pensions… in HALF!
i can hear the screams out of them already.
FG trolls on here still!
Looks like Mary’s threats hit home…
Ya, i went to the butchers yesterday, but we never discussed meat!
I’m looking forward to seeing Enda before this lot. It’ll be some entertainment. If they think Cowen’s opening statements are long at 40/45 mins, wait till Enda’s statement is landed by crane through the roof.
I’d say he’s bricking it thinking about it. “What’ll I say! What’ll I say!” like a child called to the principals office.
The brain farts will be something to behold.
A comedy musical will follow I imagine.
How can this man work for DOB and still enjoy a massive pension when families are starving and being evicted from their homes? If politicians want to work after their political careers are over, fair enough but tax payers topping up their bloated salaries? The greed of these guys disgusts me.
Your pants are on fire Brian!
Bo Selecta
Lol. Just add a goatee!
surely Brian lenihan was there for such an important decision.come on journal ask his family, ask others that was there,we do not accept this man’s lies.
1929?
Mr cowan has had issues over estimating and under estimating things throughout his political career, which resulted in both him and kenny probably being the worst and weakest taoiseach we’ve ever had. I remember a budget speech from cowan when he was finance minister during the boom and he said “sound economic policy dictates that when you have money, you spend it”. Well, you didn’t have to spend it all cowan!
Shinbots hard at work here
Cowen must think the entire population of Ireland is in a bar, with him sitting up on a high stool, pissed as a cote & listening to him weaving this yarn. He can bullshit the FFers but not the rest of us. God Almighty & we still have to bear further scutter from the other waffler from Drumcondra next week.
Utter UTTER tripe. 3rd biggest bank non the country was going down the tubes with the Quin debacle in the background and he doesn’t mention it to FitzPatrick? Gross negligence for a leader of the country not to bring it up. He’s a liar and an appalling statesman.
Guys I think it’s time Ireland came back into the United Kingdom.
A state that is only beating the EU in falling apart.
Yes the UK is doing so badly it had to provide Ireland with a bailout !
At about 7% interest.
It is an entity that is breaking up though. Scotland will leave soon enough.
Wales and the North of England will just continue to slip in to obscurity behind London.
Can I get the lotto numbers you seem to have a gift !
Oh red thumber a cowan supporter
Enough is enough is enough… wind up this CHARADE now!!! Its toothless useless!!! and a gross insult to the intelligence of the Irish taxpayers..
Post script?
Coming as it does 5 years after the horse has well and truly noted one must wonder what the point in the Banking Enquiry is ?
It seems like most business one must look to the golf course
cowen: what’s your favourite humming noise fitzy?
fitzy: I like the one that goes hmmmmm
Thankfully God Is not his witness the Irish people are his witness and they made it crystal clear in the Election what they made of his stewardship of the economy
In reality he was hamstrung by the EU where contagion must not take hold therefore it’s a fair accompli and bond holders and other stakeholders in the big casino never had anything to fear as their investments might well go up but they most certainly would never be allowed to go down as this is not part of protection project Euro
Leninism is not here to defend himself but it’s academic anyway as he would have to have agreed in any event or resign (he didn’t)
Oh I believe him, sure who wouldn’t? Now if you’ll excuse me, I’m off to send my bank details to a nice man in Nigeria; it seems I’ve won a few million in the Spanish lottery.
Great news! Enjoy your winnings!
That picture of cowen , hold em up you are under arrest for Financial Treason…..they did not discuss the banking situation ? oh lord do they think we are a bunch of dribbling idiots or what ?
Business is done on the golf course, we all know that,.
liar!
Why would they talk about Anglo Ha Ha
that’s like martin o’neill and roy keane having tea and not discussing football
A I M ……….FIRE!
It was fortunate that we paid our politicians better than any other politicians in the world so as to attract the best political talent.
Can you imagine if we paid our Government Minister and Taoiseach poorly and ended up with small thinking, small town hucksters and gombeen men, who would have been out of their depth in such a self imposed financial crisis.
Of course not. They went round the whole 18 holes in complete silence every time they played together. And I’m the Tooth Fairy!
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