Banking inquiry

Former Anglo Irish Bank executives appear at hearings today

Colin Gleeson Thu, Sep 3
LIVE: Banking inquiry

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  • 08:31

    Good morning and welcome to The Irish Times’ live blog of today’s hearings of the Banking Inquiry.

    The main course today is Anglo Irish Bank and there could genuinely be some real fireworks.

    The committee is set to hear from three senior executives who will give evidence on a range of matters pertaining to Anglo’s role in the collapse of the Irish banking system.

    Former director of corporate and retail treasury Peter Fitzgerald is the first in the hot seat from 9am.

    Mr Fitzgerald is one of the Anglo executives who featured heavily in leaked phone recordings of conversations held by bank staff in 2008, around the time the State bank guarantee was introduced.

  • 08:33

    At 11am, former non-executive director Gary McGann will appear.

    Finally, at 1pm, the former chief financial officer Matt Moran steps in.

  • 08:35

    My name is Colin Gleeson and I will be bringing as much of the action as I can throughout the day.

    If you’d like to comment or get involved, feel free to tweet me @ColinGleesonIT

  • 08:53

    After the recordings entered the public domain, Mr Fitzgerald released a statement to The Irish Times in which he said he was not a member of the executive management board of Anglo in 2008 and was not involved in the discussions conducted by senior executive management with the authorities in 2008 in relation to the funding position of the bank.

    “For the avoidance of doubt, I am not nor have I ever been aware of a strategy or intention on the part of Anglo Irish Bank to mislead the authorities in relation to the forecasted funding position of Anglo Irish Bank,” he said.

  • 08:57

    Mr Fitzgerald joined Anglo Irish Bank in 1998. While working in the Treasury Division he developed the retail savings franchise in Ireland and the UK.

    He was director of Corporate and Retail Treasury from 2006 to 2008.

    He now works as an advisor to start-up and SME companies in Ireland in the areas of strategic planning, corporate communications and business development.

  • 09:08

    Mr Fitzgerald is appearing after a representation by him to the DPP that his appearance may jeopardise court proceedings was rejected.

    “Having considered the lines of inquiry on which the committee has directed that Mr Fitzgerald give evidence before it, the director [DPP] has declined to issue a declaration under section 72 to Mr Fitzgerald,” the inquiry said in a statement.

    The DPP had already intervened to force the inquiry to withdraw its directions to three other former Anglo executives, Seán FitzPatrick, Pat Whelan and John Bowe.

  • 09:13

    Mr Fitzgerald has arrived and is delivering his opening statement.

    He says he “welcomes this opportunity” to share his experiences with the Inquiry.

  • 09:21
    Anglo took “thousands of calls from concerned customers” as the financial crisis was taking hold.
  • 09:22

    He says Anglo Irish Bank experienced “a full blown run” on customer deposits around September 2008.

    The run took place over telephones and “never fully manifested itself in the public domain”.

  • 09:28

    He concludes by saying that he “fully accepts responsibility” for any part “that I may have played in its failure and the consequences for the Irish State”.

    “It is genuinely something I will always regret,” he adds.

  • 09:28

    He says he has no documents with him and his answers will be based on his “recollections” of the events.

    Seems like a good way to do business.

  • 09:31

    Senator Michael D’Arcy is the first up to question Mr Fitzgerald and he takes the opportunity to remind everyone just who Mr Fitzgerald is.

    It is left to chairman Ciaran Lynch to play the party pooper once again however as he informs the committee that the taped conversations from inside the bank cannot be discussed for legal reasons.

    Talk about an elephant in the room.

  • 09:32

    It seems however that even if the phone calls are not mentioned, they will still have to play a significant role in the background of these proceedings.

    The committee will surely have digested those discussions and they will inform the lines of questioning.

  • 09:43

    Fitzgerald says he didn’t believe the bank was insolvent on the night of the guarantee.

    Asked whether he was aware that tens of billions would be required to underwrite the bank, he says: “No I wasn't.”

    “My role was on the other side of the balance sheet,” he says. “I wouldn’t have had any insight into the fact property values were as overvalued as they were.”

  • 09:50

    “What caused the bank to crash?” senator D’Arcy wants to know.

    “It was a liquidity crisis,” says Fitzgerald.

    “We simply couldn’t meet our short term obligations,” he adds.

    “So not the standard of the loan book as Morgan Kelly said,” continues D’Arcy.

    “Ultimately that proved to be correct, but in the months leading up to the guarantee that wasn’t evident to the bank,” says Fitzgerald.

    “Which was correct?” D’Arcy asks. “In hindsight, Mr Fitzgerald?”

    “With the benefit of hindsight, the standard of the loan book, yes,” he replies.

  • 09:55
    D'Arcy has cited a New York Times newspaper headline from 2010 which read: “Can one bank bring down a country?”

    He’s asked Fitzgerald whether he thinks the headline was a fair one.

    There is a good 15 seconds of silence as Mr Fitzgerald mulls over that one.

    “I guess in hindsight it was considering we required the greatest bailout of any bank in Ireland, ultimately,” he replies.

    “It was a bit more than that,” says D'Arcy. “It was the equivalent of half the national debt at that stage.”

    “Yes,” says Fitzgerald.

  • 10:05

    Fitzgerald says it was his view that Anglo had “no future” in the time before the Bank Guarantee was introduced.

    “We felt that the bank had very very serious issues,” he says.

    “Existential issues?” asks Fianna Fail finance spokesman Michael McGrath.

    “Yes,” agrees Fitzgerald. “It is my view.”

    McGrath would like to know what that view was based on.

    “I’m basing that view on conversations we had where we had no answers at that time. It was incredibly stressful environment where we did everything we could.”

    McGrath would like to know whether these issues were shared with the authorities at the time.

    “I had no involvement with the authorities but I had a sense that they were. I had a sense that there were lots of conversations externally but I wasn’t a party to them.”

  • 10:12
    Fitzgerald says that “in terms of liquidity”, the bank was “sound until the Lehman's collapse”.
  • 10:14

    Fitzgerald says he learned about the guarantee on his way into work the following morning.

    Can just imagine him on the 46A.

    “I was relieved but I wasn’t surprised,” he says.

    “I didn’t think at the time there were choices being made as to who was being guaranteed or otherwise. I thought it was a general guarantee to fix a systemic issue.”

  • 10:16

    Fitzgerald is asked “in hindsight” what his understanding of “the rationale” was for the guarantee to include Anglo.

    That it was “systemically important”, he says.

  • 10:19

    Fitzgerald has sought direction from chairman Ciaran Lynch before answering a question in relation to Sean Quinn’s contracts for difference stake in Anglo.

    A man has whispered in Mr Fitzgerald’s ear and asked him to step outside.

    Fitzgerald has asked for a short adjournment, which chairman Ciaran Lynch says he will accommodate.

    It seems Mr Fitzgerald is consulting his legal team.

  • 10:46

    We’re back.

    Fine Gael TD Kieran O’Donnell repeats his question.

    “When did you become aware of Sean Quinn’s stake and did it have an impact in terms of your capacity to raise deposits for Anglo Irish Bank?”

    “I was aware of Mr Quinn’s reported stake in the bank,” says Fitzgerald.

    “When did you first here the rumours?” asks O’Donnell.

    Fitzgerald says he “can’t recall when”.

    “Roughly?” says O’Donnell.

    “Roughly the start of 2008 maybe,” he replies. “The rumours were in the marketplace, and I think already talked about in the public domain.”

    He says the “St Patrick’s Day massacre” - when Anglo’s share price fell by 20 per cent – “caused considerable stress among savers”.

    “It precipitated a short run on the bank,” he continues. “What I would describe as a run was thousands of calls over a number of days - approximately four days. It went broadly unabated. Both corporate and retail deposits.”

  • 10:53
    Customers who were making withdrawals were brought inside the building to avoid queues and the perception of a run forming.
  • 11:04

    Socialist Party TD Joe Higgins loves an aul analogy.

    He wants to know if Fitzgerald thinks it would be “too dramatic” to compare Anglo to a legal drugs prescriber dealing with a highly addicted patient (the borrowers) who really should be “weaned off cold turkey”, but that the prescriber is “terrified of a cardiac arrest”.

    “I don’t think your analogy is offside at all,” says Fitzgerald.

  • 11:05

    He’s after throwing another one in there.

    “It’s musicals chairs but sometimes the music will stop.”

  • 11:09

    Senator Michael D’Arcy is back up again and he wants details of Mr Fitzgerald’s salary and bonuses.

    Mr Fitzgerald seeks direction from the chair on that issue and Ciaran Lynch informs him that the matter of pay and bonuses has arisen with several witnesses and it is prerogative as to whether or not he answers the question.

    “I’d prefer not to answer that question if that’s okay,” he says.

  • 11:10

    Fitzgerald is asked whether Simon Carswell’s book Anglo Republic: Inside the Bank that Broke Ireland painted “an accurate view of life within Anglo”.

    “I think it did,” he replies.

  • 11:16

    Bringing Mr Fitzgerald’s evidence to a close, chairman Ciaran Lynch asks him whether given the “general perception of Anglo and senior management” and that “a lot has been written and said over the last number of years”, what are his views on the public perception of Anglo.

    “Given everything that’s gone on with Anglo in terms of its activities from a business perspective and alleged issues in corporate governance I fully accept the actions of the bank can never be forgiven or forgotten,” says Fitzgerald.

    “I would never seek to defend it in a forum like this. I will leave it at that.”

  • 11:17

    That brings the evidence of Mr Fitzgerald to a close.

    We will now be moving on to Gary McGann

    Mr McGann was one of a party who played a game of golf with then Taoiseach Brian Cowen in July 2008 so I imagine that will feature in the questions posed to him.

    Mr Cowen was criticised in some quarters for his attendance at the outing with the bankers.

    He said: “I want to assure the Irish people that I didn’t do anything untoward, or inappropriate, or discuss issues I shouldn’t be discussing with any individual bank at the expense or cost of anyone else, at that time or ever.”

  • 11:18

    Gary McGann was also a key witness in the first of the Anglo trials, during which its former chairman Sean Fitzpatrick was found not guilty on all 10 counts of providing unlawful financial assistance to 10 individuals, known as the Maple 10, in July 2008 to buy shares in the bank.

    During the same trial, two former directors of the bank were convicted of providing unlawful loans to the 10 businessmen to buy shares in the bank.

    Both men were spared a custodial sentence by Judge Martin Nolan who said it would be unjust to jail the two men given “a State agency had led them into error and illegality”.

  • 11:18

    Mr McGann was a non-executive director of Anglo from 2004 to 2009.

    He is the former Group Chief Executive Officer of the Smurfit Kappa Group. Previously, he was Group CEO of Aer Lingus and CEO of Gilbeys of Ireland.

    Currently he is Chairman of Aon Ireland and Paddy Power plc.

  • 11:42

    We’re back up and running and Mr McGann says he won’t be delivering his opening statement.

    I’ll pick out a few interesting parts though, don’t worry.

    “Looking back,” he says, “the bank misjudged the risks that built up in the expansion of lending, particularly property lending, in the years up to 2009.

    “Other banks in Ireland and around the world did too.”

  • 11:42

    In terms of “factors that seriously compounded the risks to the bank’s business model”, Mr McGann cites Sean Quinn’s CFD stake and the “worldwide liquidity collapse” in autumn 2008.

    “I look back with great regret at the collapse of the bank and what that has cost its employees,  shareholders and Ireland,” he adds.

  • 11:47

    He also says in his opening statement that he has “no recollection” of the Anglo board having received “any correspondence” directly from the regulator's office.

    “I was not aware that the management received any correspondence from the regulator outlining any material concern or dissatisfaction about how the bank was operating, its business model, its risk profile or its lending practices,” he says.

    “As I understood it, the regulator routinely had reports from the bank (such as quarterly returns).

    “One significant interaction of which I am aware is that under the board’s instructions, the regulator was fully briefed from the outset on the Quinn CFD's and the bank's efforts to deal with them.

    “I was aware that there were significant exchanges with the regulator during the Quinn CFD period. If the regulator had wanted to bring any matter or concern to the board’s attention, my expectation was that he could have written to the Chairman or Senior Independent Director and it could have been dealt with promptly.

    “I had no reason, at that time, to believe that the regulatory regime was inadequate.”

  • 12:01

    Fine Gael TD Kieran O’Donnell is asking about Sean Quinn’s CFD stake.

    He wants to know what impact it had on the bank.

    Mc McGann says that the “depositing public, in terms of retail and corporate, were concerned because the share price was falling”.

    He adds that he “wouldn’t go so far as to say it was the catalyst” in the bank’s collapse, “but it was a significant contributory factor”.

  • 12:02
    McGann has also defended the high salaries at the institution, remarking that it is “important to understand the context” of remuneration.
  • 12:04

    Mr O’Donnell is now asking Mr McGann about the game of golf at Druids Glen with Brian Cowen.

    Mr McGann says that he was present at the meeting before the game of golf and at the dinner afterwards – but he didn’t actually play golf.

  • 12:08

    The meeting before the game of golf took place at approximately 9.30am, he says.

    He is asked “who booked the room” by Mr O’Donnell and he says “I’m not sure”.

    He is asked “who paid for the room” and says “I don’t know”.

    He is asked who requested the meeting and he says it was Fintan Drury, who is a former Anglo Irish Bank non-executive director and long time friend of Cowen’s.

    The meeting was in order to have “a general discussion about the economy”, he says.

    The economy “was slowing down” and the discussion was just that – a discussion – “not in any way a kitchen cabinet”.

  • 12:12

    Mr McGann is now saying that the meeting took place off-site.

    “Where was that?” O’Donnell enquires.

    “It’s not particularly relevant,” he says. “I’d prefer not to say.”

    “I think for clarity...” O’Donnell persists.

    “It was in a private home,” says McGann.

    “Whose home?”

    “Fintan Drury’s home,” he replies.

  • 12:14

    O’Donnell wants to know whether banking was discussed.

    “No,” says McGann.

    “Why didn’t you considering it was such a large element of the Irish economy,” O’Donnell continues.

    “Because it wasn’t on the agenda.”

    “Do you think that’s credible for the Irish public?”

    “Banking wasn’t discussed,” repeats McGann, who adds the meeting lasted for a couple of hours.

  • 12:17

    At the dinner in Druid’s Glen that night, the conversation involved “general social conversation”.

    Apparently Brian Cowen’s driver was invited in as he’d been on the clock all day.

    It lasted for four and a half hours.

    Throughout that, there was “no mention” of banking of any description “to my recollection”.

    “Do you accept that may be difficult for people to accept, in the context of the time?” asks O’Donnell, who is having a right go now.

    “All I can tell you is we did not discuss banking to my recollection,” replies McGann.

  • 12:20

    Joe Higgins is asking questions now.

    He is talking about the bank’s credit policy and says he was “utterly shocked” when he saw the figures.

    Chairman Ciaran Lynch rebukes Higgins for making a value judgment. None of those allowed in here.

    Higgins smiles at Lynch and can barely keep a straight face as he explains that he wasn’t giving his view at all but simply presenting what the “lay man” on the street might think of the figures.

  • 12:48

    Fianna Fail’s finance spokesman Michael McGrath is up and he wants to know why Mr McGann’s opening statement was so short at just three and a half pages.

    “You were asked to talk on a number of issues, so it strikes me as very short,” he says.

    Mr McGann said he opted to just address the issues on which he felt qualified to do so.

    “I wasn’t really in a position to elaborate,” he says. “I tried to give as much as I could without speculating.”

  • 12:52

    McGrath asks when did McGann realise that Anglo’s future as an independent financial institution with no intervention or State support was no longer tenable.

    “I don’t think there was a point in time,” he replies. “All the banks were struggling with all points in time the board saw this as a funding liquidity problem.”

  • 12:58

    McGrath is asking about the practice at Anglo of accepting “verbal assurances” as security to underpin loans valued in the millions.

    McGann points out that these “verbal assurances” came from lawyers.

    “Was that acceptable?” McGrath wants to know.

    “No it’s not ideal at all, but it happens,” replies McGann.

    “I’m not condoning it at all,” he adds.

    “It happened a lot at Anglo,” says McGrath.

    “There is evidence of progress, numbers were reducing, but yes it did,” replies McGann.

  • 13:02

    McGann clarifies to the committee that everyone at the bank was answerable to its board.

    Chairman Ciaran Lynch is enquiring as to whether there was “any concern at board level” with regard to chief executive David Drumm and how the bank “was being managed”.

    “No, chairman, is the honest answer,” says McGann.

  • 13:11

    Sinn Fein finance spokesman Pearse Doherty is talking about the St Patrick’s Day Massacre again.

    Was it discussed at board level, and what did they do about it?

    “Yes it was discussed on a number of occasions,” says McGann. “At the time, the big factor that was weighing on the minds of the board was the uncertainty over the CFDs and the increasing clarity of what they meant for the business in terms of an overhang.”

  • 13:13

    Now we’re on to the golf excursion again.

    Doherty says Brian Cowen “didn’t provide any indication whatsoever that there was a meeting off site beforehand”.

  • 13:16

    As we move towards a conclusion of Mr McGann’s evidence, Kieran O’Donnell is asking the questions again.

    Sean Quinn’s CFD stake is described as “not at all a healthy situation” by McGann but he stops short of saying that it could have taken down the bank all on its own.

  • 13:20

    O’Donnell is trying to get an idea of the “prevailing mood” at the bank in the days before the guarantee.

    “It was extremely fraught, and very challenging, but it was totally liquidity based,” McGann says. “Anglo was absolutely chocked in the broader system and a liquidity event was needed.

    “There was fundamental need to address what was looking like a very challenging liquidity situation.”

  • 13:27

    In reply to questioning from Joe Higgins, Mr McGann says that, to his knowledge, it was not common for Anglo executives to attend dinners with senior political figures.

    “No, to my knowledge, but I should caveat that with that I travelled a lot,” he says.

    “I’m aware there were previous ones, before my time and maybe during my time.”

    “Who was there?” wonders Higgins.

    “I’ve heard names but I don’t definitively know,” says McGann.

    And were there ever dinners with representatives of the financial regulator or the Central Bank?

    “I couldn’t be definite but I think there may have been a dinner with a representative of the Central Bank,” replies McGann.

  • 13:32

    Ciaran Lynch, wrapping things up, asks for McGann’s views on his own performance at the bank.

    He says he doesn’t feel he “short-changed the business or the shareholders or the staff”.

    However, as a member of the board, he says, he shares a collective responsibility with his colleagues.

    Lynch, who possibly could have saved this question for the pub later, wants to know if Mr McGann is glad that he ever worked in Anglo.

    “On a human level, I’d be a happier man if I hadn’t been there,” comes the reply, “but, given that I chose to accept the offer, I did my best.”

  • 13:34
    The Inquiry has broken for lunch at this point at will continue from 2.30pm when Anglo’s former chief financial officer Matt Moran will begin his evidence.
  • 14:19

    Among the likely interesting pieces of evidence from Matt Moran will surround the circumstances of a phone call made by Taoiseach Enda Kenny to him in November 2008.

    Mr Kenny revealed during his evidence to the Inquiry in July that he had made the call but that nothing “of substance” had been discussed in relation to the banks.

    “I was asked to make a call to him, that he had wanted to say something to me, or so I was led to believe,” Mr Kenny said.

    “He didn’t say anything to me of any substance about any banks. And I gave ... I would have given no information whatsoever because I wouldn’t be in a position to have that information.”

  • 14:25

    Mr Moran was chief financial officer at Anglo from 2004 to 2008 and finance director from 2009 to 2011.

    He is currently a partner in the Corporate Finance division of PWC Luxembourg.

  • 14:54

    Mr Moran has begun to deliver his opening remarks.

    He says the change of role from chief financial officer to finance director in 2009 was a change of title only – it was the same job.

  • 15:00
    Mr Moran says he wants to express “my own sincere and deep regret for the hardship that the bank and wider banking system in general inflicted on many”.
  • 15:04

    Sean Quinn’s CFD stake rears its ugly head again.

    “The inherent difficulties surrounding the entire banking industry, and specifically Anglo Irish Bank's position as a small player in the banking pool,” says Moran, “was compounded by the shareholder issues.

    “By these I refer to Sean Quinn's CFD investment in the Bank and problems arising from its unravelling.”

  • 15:08

    In terms of the appropriateness of the guarantee, Mr Moran says the difficulties faced by those involved in making the decision were “formidable”.

    “I first learned of the guarantee after it had been announced on national radio and have no knowledge of the specific background to the guarantee decision,” he says. “It had a hugely positive, stabilising impact in the market for Irish banks.”

  • 15:09

    Everybody involved in the crisis “struggled to deal with unprecedented situations”.

    “It was my perception that the authorities worked strenuously to attempt to manage the never ending series of complex issues arising,” he adds.

  • 15:10
    Mr Moran, under questioning from Fine Gael TD Eoghan Murphy, says he had shares in the bank, but that this never clouded his judgment when carrying out his duties as chief financial officer.
  • 15:17

    Murphy enquires as to whether Mr Moran had any “political contacts” around the time of the guarantee.

    He replies that he had “two in particular”.

    He says the chief executive David Drumm asked him to make contact with the then leader of the opposition Enda Kenny.

    “I contacted Enda Kenny and arranged for him to meet Willie McAteer,” he says.

    A meeting was set up with McAteer, Drumm , Moran and Kenny.

    Moran says Drumm presented Mr Kenny with “a pack” pertaining to the background of the bank and its business model.

  • 15:20

    The second “political contact” was Beverley Cooper Flynn, he says.

    “She told me at the time she was involved in a group looking at issues relate to the crisis," he continues.

    Murphy wonders why the contact the bank had with the political establishment was limited to the opposition benches.

    “Contact with the opposition pertained just to the general noise in the markets that public representatives were making,” says Moran. “To my knowledge Anglo had little or no political contact.”

    He adds that the bank had to “start from scratch” in terms of building relationships with government figures when everything went south.

  • 15:30

    Mr Moran says he had lunch with Morgan Kelly.

    “And you didn’t like his views?” speculates independent senator Sean Barrett.

    “We had a very open discussion and I found his views very interesting,” says Moran. “Of course he was proven to be have been very right.”

  • 15:35
    Incidentally, it emerged in 2013 that Mr Moran was granted immunity from prosecution by the Director of Public Prosecutions for all matters relating to Anglo Irish Bank.
  • 15:40

    Sean Barrett is given a slap on the wrist by chairman Ciaran Lynch after he cited a number of claims from different people who said they had been involved in altercations with Moran after they criticised the bank.

    With value judgments and leading questions coming out of his ears, Barrett lost the run of himself for a minute there.

  • 15:45
  • 15:49

    Lynch is asking for more information in relation to contact with political figures.

    “I visited the Department of Finance so I had some other contacts but they were routine in nature,” replies Moran.

  • 15:53

    Lending was “the heart” of Anglo, he says.

    “It did nothing else really.”

  • 16:02

    Fianna Fail finance spokesman Michael McGrath is questioning Moran about dealings with Enda Kenny.

    He refers to the aforementioned phone call with Kenny, which the Taoiseach said included “nothing of substance”.

    “I think that’s fair to say,” says Moran.

    Moran explains that his dealings with Kenny largely pertained to the various rumours that were going around in relation to the bank and the wider system.

    “I think the context was that there was noise around,” he says.

    “Literally, rumours were ten a day.”

  • 16:06
  • 16:10

    Fine Gael TD John Paul Phelan asks whether Moran’s portrayal as a “chief whip type” was something he embarked upon of his own accord, or whether it was part of his job description.

    Moran says it isn’t for him to comment on how he was perceived by others, or what was written about him, but says the meeting with Morgan Kelly took place at the request of the bank’s chief executive David Drumm.

  • 16:20

    Kieran O’Donnell moves the focus back to Sean Quinn’s CFDs, and wonders had they not existed whether Anglo would have had enough liquidity on the night of the guarantee.

    “It would have been a lot less of an issue,” says Moran.

  • 16:22
    He says it is his understanding that the financial regulator was fully informed of all aspects of the CFDs and approved of all the actions taken by the bank in relation to them,
  • 16:32
    At statement from Enda Kenny in 2013 in relation to the alleged contact with Moran and Anglo said: "Any contacts between Fine Gael and the banks during the banking crisis were aimed at highlighting the impact that the continuing uncertainty about the banking system and its impact on credit availability was having on businesses and jobs."
  • 16:35
    Moran has said Kenny suggested that Anglo could become “an offshoot” of Bank of Ireland during those discussions, which would seem to contradict the Taoiseach’s assertions that strategy in relation to the bank was not discussed.
  • 16:48

    That concludes Moran’s evidence to the Banking Inquiry – and indeed the witnesses pertaining to Anglo Irish Bank.

    Shortly, David Went, former group chief executive of Irish Life and Permanent/Permanent TSB, will begin his evidence.

  • 16:49

    Mr Went was appointed managing director of Irish Life Assurance plc, Dublin in 1998 and group chief executive of Irish Life & Permanent plc in 2000.

    He retired in May 2007.

    Mr Went spent most of his career with the NatWest Group where he was chief executive of the Ulster Bank Group from 1988 to 1994 and chief executive of Coutts Group from 1994 to 1997.

  • 17:09

    Mr Went has arrived and is delivering his opening statement.

    In it, he says the institution’s lending strategy was “focussed around house mortgages” (both for residential purposes and investment) which accounted for the bulk of the loan portfolio (88 per cent).

    In addition about 5.5 per cent of total lending was accounted for by commercial loans for the purchase of investment property generally with the benefit of a long term lease.

    “There was no lending for speculative land banking or development activities,” he adds.

  • 17:12
    In terms of stress tests, he says “the most significant defect, which probably gave a sense of false security to all concerned, lay in the absence of tests involving stress on the funding side”.
  • 17:15

    On pay and bonuses, he basically says that what they were doing was fair enough but obviously everyone went bananas over pay and so they have to deal with the criticism.

    “Overall remuneration terms were reviewed regularly with the advice of international remuneration consultants and were intended to provide market median rewards,” he says.

    “While at this remove, total reward is substantial, it was not high relative to analogues in the Irish market.

    “However, it is clear that public perception of remuneration in financial services at this time was that it was excessive and it is clear that this perception is reality for financial service executives including myself.”

  • 17:22

    You’d need a hammer and a pick to get through all this finance speak, but I can safely say he is criticising the regulator.

    “When on-site inspections in any aspect took place (rarely) there was substantial delay in furnishing reports and dealing with a bank’s responses to such reports,” he says.

    “Responses from the regulator to the submission of requested responses on particular topics were also very slow, reducing the value of any interaction and led to frustration.”

  • 17:24

    He also says the regulator “appeared reluctant to use its power of moral suasion” that he believed it possessed, and that it instead “preferred to take a very legalistic view of its power”.

    “I recall contacting the regulator regarding the introduction of 100 per cent mortgages which I regarded as an unnecessary and unwelcome development,” he continues. “It was made clear to me that the regulator regarded itself as powerless to intervene.”

  • 17:25

    The regulator “failed to fulfil its prudential function”.

    “It is primarily a failure on the part of management and boards of banks that was responsible for the crisis that emerged,” he says.

    “However, as with all participants in the creation of the crisis I am sure that different decisions at different times by the regulator could have reduced the severity of events.”

  • 17:27

    He says the institution had “a business-like and professional relationship” with the regulator.

    “I can recall only a couple of occasions when I would have personally contacted the regulator on a matter of concern and only one semi social event – an in-house lunch with my chairman at the offices of the regulator,” he adds.

  • 17:44
  • 17:50

    Pearse Doherty asks Mr Went what role did he play in the institution reaching a point whereby it needed to be rescued by the State.

    “Or do you absolve yourself?” he adds.

    “Of course I don’t absolve myself,” replies Went. “I’ve made the point that we made an error, in hindsight, in relation to not fully recognising Prof Nyberg’s point in relation to capital markets.

    “We also made an error in not recognising that there was a possibility of a 150 per cent drop in house prices.

    “Those were two errors that were made and I take responsibility for that.”

  • 18:01

    Fianna Fáil has released a statement calling on the Taoiseach to clarify evidence given to the Inquiry after testimony from Enda Kenny was "contradicted" by Matt Moran.

    “This is a very worrying development and raises serious questions for the Taoiseach,” according to Billy Kelleher.

    “I think Enda Kenny should seek to immediately clarify the matter surrounding his contact with Anglo Irish Bank in 2008. It would be a very serious matter if the Taoiseach has misled the Banking Inquiry.”

  • 18:04

    “Enda Kenny rejected the assertion that he shared information with Matt Moran, former chief financial officer with Anglo Irish Bank, about a possible deal between Bank of Ireland and Irish Life and Permanent in 2008,” Kelleher continues.

    “Mr Kenny said: ‘I reject that assertion completely’.

    “Today Mr Moran contradicted the Taoiseach’s evidence and said Mr Kenny had discussed very specific information about the banking sector and what potential outcomes there would be for Anglo Irish Bank in the midst of the financial crisis.

    “Mr Moran told the Inquiry today that Enda Kenny, as Leader of Opposition in 2008, discussed the possibility that Bank of Ireland would be required by the State to take over Anglo.

    “Mr Kenny had stated at the Inquiry that ‘I had no conversation of any substance with Mr Moran.’ I think serious questions now hang over this claim by Mr Kenny given the evidence heard today. This must be clarified in the public interest.”

  • 18:33

    Went is asked by Independent senator Sean Barrett about a speech he gave in which he defended bankers.

    Went says there are instances where banking executives fell “short of public standards” but that the “considerable amount of public comment that all bankers are dishonest” was “not the case”.

  • 18:39
  • 18:58

    Joe Higgins says the family home should “not be the subject of profiteering and speculation”.

    Even after ten hours, he’s still going strong.

  • 19:00

    Chairman Ciaran Lynch has brought the evidence of Mr Went to a close at this stage.

    That also concludes today’s live blog of the Banking Inquiry. It’s been interesting. Thanks for reading, and for reports and analysis in relation to today’s events see and tomorrow’s newspaper.