Bankers lied for bailout by Irish taxpayers

This video from Ireland says about itself:

Irish bankers secretly recorded planning how to screw over Irish taxpayers during 2008 bailout

June 24, 2013

Mr Bowe’s comments in the audio recording reveal that Anglo’s strategy was to lure the State in, leaving taxpayers with no choice but to continue to provide loans to “support their money”. The recording also shows Mr Bowe and Mr Fitzgerald laughing as they say how there is no realistic chance of ever repaying the loans.

By Matina Devlin, in the Irish Independent in Ireland:

25 June 2013

Emigration is at famine levels because Anglo bankers lied. Workers are on the dole because Anglo bankers lied. Homeowners can’t pay their mortgages because Anglo bankers lied. Public service cutbacks, especially in health and education, are causing suffering because Anglo bankers lied. And Ireland lost its economic sovereignty because Anglo bankers lied.

Not just recklessness, but deception on the part of bankers protecting their broken bank – and their own skins by extension – brought Ireland to the verge of ruin.

An independent republic was reduced to a satellite state by the world’s worst bank – and citizens are still picking their way around the crater left behind after Anglo crashed and burned. …

The truth would have stopped the next generation’s future being sacrificed to prop up a hopeless case.

The Irish people had a hunch we were cheated long before any of us listened to the Anglo Tapes. We know it for a fact now. Sadly, we are not disillusioned by how readily the regulators were conned. Nor are we surprised at bankers using citizens as sitting ducks. …

The recording – in which two bankers cheerily chat about the Central Bank being manipulated into funding vast losses – captures in a few sentences why Irish citizens are broke and desperate. Hustlers scammed our gatekeepers, yet nobody has been held accountable.

For almost five years the tapes have lain there, ready to detonate. How odd they should only surface now, when it’s too late to reverse the wealth-stripping of citizens that was activated by the bank guarantee.

Strange, too, why a conversation between back-office, spreadsheet bankers is the one made public, rather than any phone calls involving David Drumm – there must be some fraught examples there. Anglo’s former chief executive relocated to the US in jig-speed, shortly before nationalisation, and refuses to return to Ireland to face garda questioning.

And what about the pillar banks? It would be fascinating to take a trawl through their phone records, and scrutinise how they shape up in their dealings with the Government and regulatory authorities.

But the Anglo tapes are what we have to work with. They lay bare the way citizens were treated like an ATM machine. No pretence is made of borrowings ever being repaid – the two executives chortle at the notion of taxpayers ever seeing the colour of their money again.

In fact, far from needing €7bn as a short-term loan, Anglo was losing €1.5bn a day by the time the recording was made in mid-September 2008, following Lehman Brothers’ liquidation.

While the conversation is loathsome, even upon repeated listening, almost harder to accept is how easily the nation’s fate was determined. Why did regulators even bother listening to their back-of-an-envelope €7bn guesstimate?

Regulation was toothless, leaving us as lambs to the slaughter. Yet even now we hear calls for light-touch regulation, most recently from IFSC chairman John Bruton.

Beyond a shadow of doubt, if those tapes had emerged in the immediate aftermath of the bank guarantee, the present would be shaped differently; austerity would be less onerous. The Government could have revised the guarantee on the basis it had been duped.

Behind the banter and bravado, it seems hard to believe that Anglo executives didn’t realise an enormous fraud was being perpetrated on the State.

The word ‘strategy’ was used, and “the cost to the taxpayer” by one of the men on tape, John Bowe.

He and Peter Fitzgerald, the other party to the conversation, weren’t even among the bank’s most senior staff. Even as Armageddon loomed, they continued to insist that Anglo’s difficulties were down to liquidity rather than insolvency. Just a little cash-flow hiccup.

Let’s remember who called it right, and ask ourselves why official Ireland’s reaction seesawed between ignoring and mocking him. One week after the bankers were recorded, UCD Professor of Economics Morgan Kelly told ‘Prime Time’ that Irish banks had made a lot of large loans to developers and were saddled with bad debts. He questioned whether all of the banks needed saving.

“It’s not liquidity is the problem for these guys, it’s bad loans,” he said. “They’re huffing and puffing and pretending it’s not going on.” Even as the guarantee was announced, he predicted the banks would make “terrific losses” on those bad loans.

Anglo’s nationalisation followed, and Irish citizens took its losses on the chin: a sucker punch which floored us.

Now, could someone please explain why anyone pays the slightest attention to bankers when they push for people struggling with mortgage repayments to be evicted from their homes?

See also here. And here.

Why do we continue to pay the debts of Anglo gangsters? Here.

Return of recession exposes abysmal failure of austerity and continuing cost of bailing out “gangster” banks: here.

Related articles

• International reaction to Anglo tapes revelations (irishtimes.com)
• Anglo Irish bankers ‘tricked’ government into bailout (telegraph.co.uk)
• Irish PM pledges probe into Anglo bank disaster (star-telegram.com)
• ‘Get them to write a big check:’ Irish banker pulls bailout figure from ‘arse’ in leaked tapes (rt.com)
• Former Taoiseach Brian Cowen refuses to comment on Anglo tapes controversy (independent.ie)
• Anglo Irish bankers ‘tricked’ government into bailout (rvnewstoday.com)
• International media coverage of Anglo recordings points to ‘suckered’ Irish government (irishtimes.com)
• ‘Arrogant’ bankers caught on tape spark outrage in Ireland (thestar.com)
• ‘AIB and Anglo lending to every cowboy in town’ (independent.ie)