SHANE ROSS – 07 JULY 2013
Top civil servant Ann Nolan and Anglo's
John Bowe sound like a bereaved couple on the latest Anglo tapes.
"You have all my sympathy. I understand
exactly where you are coming from," oozes Nolan, the woman currently
tipped for the Financial Regulator's job, after Bowe sighs, pleading that he is
"beat, totally beat" after six months of struggling for the cause of
the rogue bank.
"Oh, join the gang," replies Nolan,
laughing. They would all sink or swim in this together.
Such chumminess in the face of national calamity is
difficult to stomach. It occurred just before Christmas, on December 23, 2008.
Four days earlier, David Drumm had departed in disgrace.
Three weeks later, Anglo collapsed completely. The
shares were suspended, worthless, having tanked by 98 per cent in 2008. Small
shareholders were left destitute. The bank was nationalised.
Yet Nolan, one of the most senior guardians of the
national finances, is frequently heard laughing on tape with Bowe, one of those
responsible for the disaster that brought the nation to its knees.
They were united against the outside world. Both
bemoaned the downgrade of Anglo by ratings agency Standard & Poor's. They
comforted one another by claiming that the agency's negative report was
pre-ordained, that the authors would not listen to anyone with a different
angle. They complained that S&P had made up its mind before consulting
anyone. Of course, we only had to wait a couple of weeks to know that S&P
was right.
The Department of Finance and Anglo were circling
the wagons. The duo, supposedly pursuing different agendas offering checks and
balances, echoed each others' sentiments. The tapes show that Nolan was even
completing Bowe's sentences for him.
God knows, should Nolan not have been challenging
Anglo's solvency?
Should she not have been quoting the S&P views
about the rogue banker and defending the Irish taxpayer from the fate that was
about to befall us?
Instead, after asserting that the outside world was
to blame, Bowe was unctuous when thanking Nolan for her assistance:
"Anyway, look Ann, I just want to say I appreciate your help."
You bet he did. There was a lot of laughter on the
line. In turn, Ann was optimistic about the future, wishing John a happy
Christmas. She was off for a week.
Meanwhile, Anglo Irish Bank and Ireland itself were
going down the tubes.
The dialogue between the two is another eye-opener,
revealing the hideously close relationship between top mandarins and the
banking cowboys. The tapes suggest that the civil servants were unmoved in the
face of external alarm bells, prepared to back the native pirates against the
verdict of independent outsiders – such as the cruel markets and the ratings
agencies.
The Fine Gael/Labour government's reaction to the
tapes has been simple: Hunt the whistleblower. The extraordinary decision of
the liquidator of Anglo to chase the source of the leaks is infantile. His or
her identity is of little consequence in comparison with the awful realisation
from today's tapes that the civil servants displayed signs of Stockholm
Syndrome as far as Anglo was concerned.
Finance Minister Michael Noonan's response to the
tapes – that journalists are "mucking around in garda business" – is
numbing. Tom Lyons, Gavin Sheridan, Paul Williams and others have recently
filled a gap that should make Garda Commissioner Martin Callinan blush at the
failure of his force to flush out the guilty parties in the long five years
since the bank guarantee. The identity of the whistleblower is utterly
irrelevant – though he or she should be given a hero's welcome in Aras an
Uachtarain. Judging by his recent noble words, President Michael D Higgins
himself does not share the Government's eagerness to hunt down the hero.
The other taped talk – between Bowe and the
regulator's Prudential Director Con Horan – shows a similar relationship. Horan
is obviously getting it hot and heavy from bankers at home and abroad that
Anglo is breaking a solemn agreement not to exploit the bank guarantee when
selling its products. Ulster Bank and HBOS (two banks not covered by the
guarantee) were known to be fuming at Anglo's State-assisted competitive edge.
On the tape, Horan is pleading with Bowe to ease up on the hard-sell.
He is almost apologetic: "I was hoping,"
says Horan, "if you could come down to me for 15 to 20 minutes this
afternoon." He went on to explain to Bowe that "I need to just
understand your strategy a little bit better".
Horan should be bawling the Anglo man out, ordering
Bowe to stop flogging Anglo products with this guarantee as a prohibited bait.
He should be imposing heavy fines on the spot. Instead, he asks Bowe if he
could drop by at 2.30 for a chat! He explains to Bowe that he may be
"over-egging" the guarantee, pissing off competitors to a point when
the golden goose of the bank guarantee will be killed.
Instead, at a time when European leaders were
blowing a fuse about Irish bankers using the guarantee to poach funds away from
competitors without such security, Horan volunteers that "we could blow
this up at European level". There is little sense of urgency.
The regulator should have been threatening fire and
brimstone on Anglo, demanding an immediate cessation of its sharp practices.
That was not the way regulation worked in Ireland. The regulator was the
supplicant, the banker the boss. Horan seems more cowed by his colleagues in
the domestic banks than by the collected crowned heads of Europe.
It is obvious from these new tapes why David Drumm
and John Bowe were caught on an earlier tape mocking the regulator, Paddy
Neary. It is clear why they had no fear of the Department of Finance. They believed
they could walk on water. The weak mandarins and feeble regulators encouraged
them to believe they were masters of the universe.
Irish
Independent
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