Banks get €7bn but Lenihan faces crisis

http://www.independent.ie/national-news/banks-get-83647bn-but-lenihan-faces-crisis-1636903.html

FINANCE Minister Brian Lenihan last night pumped €7bn into the country's two biggest banks despite being badly damaged in a series of dramatic revelations.

The minister's competence and reputation were called into question after he admitted he had not fully read a crucial government report into the troubled banking system.

Last night he also disclosed that he did not inform Taoiseach Brian Cowen about a huge secret deposit at Anglo Irish, even when the Government took control of the bank last month.

His sensational admissions completely overshadowed the Government's €7bn injection of funds into AIB and Bank of Ireland.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Apparently Cowen didn't hear about the huge secret loans until he read it the other day on the Property Pin. Lenihan pooh-poohs calls for his resignation saying there would have been no difference anyway whether Cowen knew or not. Hmmm. Lack of information-relating again ... Someone is not reading the meter, the temperature gauge, the oil light is flashing and no one is reading it.

Doesn't matter cause Lenihan and FF have a good insurance policy.

Dermot Ahern and Richard Bruton on PK now. PK says Lenihan should have been watching out for "window dressing".

Ahern: "this is about the survival of our financial system" and "the markets don't like this recap because of political posturing [from the Opposition?]"

Bruton: "I hope this works but I don't believe it. BOI have just admitted they've now two billion extra debt - that's already two billion gone out of the 3.5bn.... we think there's a better way but ..."

PK: "the government won't take your proposals on board - you'll be beaten in a vote"

Bruton: "it wouldn't inspire confidence that this was a well-thought-out strategy..."

PK is telling Dermot Ahern that his questions to Bruton are loaded. The suggestion is that the people who got us into that - the bankers - are the best qualified to get us out ..

"I don't think so" - Pat Kenny


Bruton is talking about a Good Bank and a Bad Bank - AIB New / AIB Old and the New would be recapitalised and the Bond holders would take the hit for the Old if that was to be the case.

Ahern was saying that the taxpayer would take most of the hit, Bruton was saying it wouldn't ...


They're moving on to whether the Fraud Squad should go into Anglo or not now ....

Is History repeating itself?

Sounds to me like Lenihan is taking one for the Gipper. I wonder, should the need arise, and he needs vital medical/political aid, will his alleged benefactor shaft him?

I don't hold with this excuse of not having read the document fully. The important bits would have been red inked for him by his advisors. Same should go for Mr Cowen, either he's not running a tight ship, in the middle of a hurricane that we had advance warning of, or he's working to an agenda that requires some sacrificial lambs, taken from the same trough he feeds at. Neither is good.

Nonetheless, we should not be influenced into thinking that the opposition are offering an alternative plan. What we really have, in effect, is a group of whores arguing over the price.

Possibly Hermes. But we know the fat one at the back is definitely overcharging us and she definitely gave us the knobrot. We really need to dump her regardless.

Mods - feels free to delete this if it is considered inappropriate, but bear in mind, sometimes, there are no other words.

coc wrote:

Possibly Hermes. But we know the fat one at the back is definitely overcharging us and she definitely gave us the knobrot. We really need to dump her regardless.

Mods - feels free to delete this if it is considered inappropriate, but bear in mind, sometimes, there are no other words.

No argument about being rid of the fat one. Although I believe that to display the penicillin might have the whole bunch running for cover.

Loved the article in your link.

Hermes is right that the report would have to be red inked.

If the Minister for Finance spent his time reading 700 page reports we would be in trouble.

He says he read the relevant bits at the relevant times. He was made aware of the IL&P deposit/loan before Nationalisation and he then read that part of the report.

Lenihan said that matters are referred to the regulator by his department every day. He also said that this was noticed and referred. Lenihan admitted that he may not have grasped the significance of it (i.e., the fact that it was referred to as a deposit and not as an inter-bank loan) if he had read it when the report was first published (as movements of large amounts of money are not unusual). He said that the officials flagged it's significance to him before nationalisation.

I think the loan/deposit/accounting issue is serious but I think that whether Lenihan read the report is red herring being exploited for crude political purposes. Apart from that, I would be more interested in criticism from Ruairi Quinn and Michael Noonan who know what being Minister for Finance involves.

Zhou_Enlai wrote:

Hermes is right that the report would have to be red inked.

If the Minister for Finance spent his time reading 700 page reports we would be in trouble.

He says he read the relevant bits at the relevant times. He was made aware of the IL&P deposit/loan before Nationalisation and he then read that part of the report.

Lenihan said that matters are referred to the regulator by his department every day. He also said that this was noticed and referred. Lenihan admitted that he may not have grasped the significance of it (i.e., the fact that it was referred to as a deposit and not as an inter-bank loan) if he had read it when the report was first published (as movements of large amounts of money are not unusual). He said that the officials flagged it's significance to him before nationalisation.

I think the loan/deposit/accounting issue is serious but I think that whether Lenihan read the report is red herring being exploited for crude political purposes. Apart from that, I would be more interested in criticism from Ruairi Quinn and Michael Noonan who know what being Minister for Finance involves.

Wouldn't an advisor have said "Brian that's a €7bn loan that came from IL&P yesterday and looks suspicious, we need to think about this before we go ahead with any guarantee. In fact we need a lot more information from Anglo on this - I think we should refer it to the regulator and keep a big eye on it"

Methinks it more likely that the advisor would have said something like: "Fuck it Brian, get out of this now while you still can. See that €7billion? The fuckers are pulling a fast one and you'll be helping them pull it off at the expense of the country if you proceed. Please Brian!!! Brian take your fingers out of your ears.

Brian!! Brian come back!!!"

Auditor #9 wrote:

Zhou_Enlai wrote:

Hermes is right that the report would have to be red inked.

If the Minister for Finance spent his time reading 700 page reports we would be in trouble.

He says he read the relevant bits at the relevant times. He was made aware of the IL&P deposit/loan before Nationalisation and he then read that part of the report.

Lenihan said that matters are referred to the regulator by his department every day. He also said that this was noticed and referred. Lenihan admitted that he may not have grasped the significance of it (i.e., the fact that it was referred to as a deposit and not as an inter-bank loan) if he had read it when the report was first published (as movements of large amounts of money are not unusual). He said that the officials flagged it's significance to him before nationalisation.

I think the loan/deposit/accounting issue is serious but I think that whether Lenihan read the report is red herring being exploited for crude political purposes. Apart from that, I would be more interested in criticism from Ruairi Quinn and Michael Noonan who know what being Minister for Finance involves.

Wouldn't an advisor have said "Brian that's a €7bn loan that came from IL&P yesterday and looks suspicious, we need to think about this before we go ahead with any guarantee. In fact we need a lot more information from Anglo on this - I think we should refer it to the regulator and keep a big eye on it"

It wasn't a loan , it was a deposit and as far as I can see, it came after the bank guarantee, not before.

Hermes wrote:

the important bits would have been red inked for him by his advisors.

Listening to Lenihan on Morning Ireland, the impression I got was this bit wasn't red-inked.
Lenihan asked his advisors for a report on Anglo's loans.
The information about the digout from IL&P was in this report, but was glossed over because it wasn't about loans.

Lenihan and Bruton now talking about it in the Dail

Auditor #9 wrote:

Zhou_Enlai wrote:

Hermes is right that the report would have to be red inked.

If the Minister for Finance spent his time reading 700 page reports we would be in trouble.

He says he read the relevant bits at the relevant times. He was made aware of the IL&P deposit/loan before Nationalisation and he then read that part of the report.

Lenihan said that matters are referred to the regulator by his department every day. He also said that this was noticed and referred. Lenihan admitted that he may not have grasped the significance of it (i.e., the fact that it was referred to as a deposit and not as an inter-bank loan) if he had read it when the report was first published (as movements of large amounts of money are not unusual). He said that the officials flagged it's significance to him before nationalisation.

I think the loan/deposit/accounting issue is serious but I think that whether Lenihan read the report is red herring being exploited for crude political purposes. Apart from that, I would be more interested in criticism from Ruairi Quinn and Michael Noonan who know what being Minister for Finance involves.

Wouldn't an advisor have said "Brian that's a €7bn loan that came from IL&P yesterday and looks suspicious, we need to think about this before we go ahead with any guarantee. In fact we need a lot more information from Anglo on this - I think we should refer it to the regulator and keep a big eye on it"

The loan was notified in the Price Waterhouse Coopers report. It is not apparent that it was notified at the time of the Guarantee. In any event, the reason for the Guarantee was to facilitate loans to Irish Banks.

The Dept of Finance (who I am not a big fan of) did notify the Regulator when they saw this in the PWC report. Furthermore, they did notify Lenihan that this was an issue prior to the Nationalisation of Anglo going ahead.

The issue is not whether Lenihan read it but when he read it. Listening to Lenihan on MI this morning he seemed to suggest that there was an issue with this not being reported as an inter-bank loan but rather being reported as part of Anglo's deposit base.

One thing is clear, the Government has been right not to respond to calls for urgent action until they have the full picture. I hope that recapitalisation will keep us afloat until the EU countries agree an approach to remedy the situation. I don't think anybody believes for one minute that recapitalisation will re-open credit lines or solve the situation.

One last thing, not only should we clear out the top echelons of the bank and restructure the Regulator after all this. We also need to re-design and clean out the Dept of Finance.

Zhou_Enlai wrote:

One last thing, not only should we clear out the top echelons of the bank and restructure the Regulator after all this. We also need to re-design and clean out the Dept of Finance.

Absolutely. We should clear out the top 3 or 4 layers in every civil service department. Most of these people got the gig by demonstrating longevity and that culture has to change. The permanent government needs to be overthrown and replaced with talent from lower down the civil service and also from the private sector. A cosy culture where the foxes and the chickens are all conspiring to screw the farmer has developed over the last few decades and it has got to stop. I have heard of one senior minister saying to a constituent who had a problem with a government department that

Quote :

there's nothing cane be done about the permanent adminsitration

My own experience extends no further than dealing with Dept of Health and Dept of Ed, but if the apalling unprofessionalism and incompetence I have seen at the upper levels of those Departments is reflected across the board then it is no wonder the country is banjaxed. An incidental benefit of such a cull would be that it would save a pile in salaries.

Joan Burton is calling Lenihan "an apprentice Minister for Finance" and says "the Master is just one step above you and doesn't get to see the report" ...

She wonders did the Greens even see the report ...

She's saying the Cabinet is short-selling Ireland

She's busting everyones' chops - revelations yesterday "stunning and depressing ..."


I should have started out with Lenihan who sounded very very confident and convincing. Good game all round

Auditor #9 wrote:

She wonders did the Greens even see the report

Did the other FF ministers see it? Did the FF backbenchers? Did the ex-PDs? Did Lenihan, to be honest?
That was a pointless question, except to bash the Greens.

She's giving great sounbites though.. I esp liked "short-selling the country" and "Nationalisation without national control".

I like the new Flash interface to the live Dail broadcast.
http://www.oireachtas.ie/viewdoc.asp?fn=/documents/livewebcast/DailFlash512KB.htm

Anyway, Joan Burton graciously thanked the Minister for answering her question last night, that led to the suspension of Roisin Shorthall.
The question was, will Quanglo sponsor a race at Cheltenham this year as usual.
The reply was that it wasn't for the minister to decide, but no.

eoinmn wrote:

I like the new Flash interface to the live Dail broadcast.
http://www.oireachtas.ie/viewdoc.asp?fn=/documents/livewebcast/DailFlash512KB.htm

She's letting off a few stinkers alright about the Greens - it's a bit gratuitous but she's deadly on the figures saying the Guarantee was not free but would cost 2.4bn because of interest rate changes....

Is there an easy way of taping this stuff and uploading it to youtube do you know eoin?

Don't let me put you off the show.

Can you imagine having your chops busted by Joan Burton?; like if she was your teacher and she wasn't happy with your application?; or your mother who wasn't happy with your room? Oh the grinding righteous indignation.... oh the repeated shock and outrage... oh the endless perorations... oh hand me that naggin...

She just told Lenihan not to allow the bankers a salary more than he was getting himself i.e. a quarter of a million. Plus a car. "That's not breadline money" says Joan.

What exactly is breadline money for these guys ?????

Morgan is saying that their salaries are being slashed by a third from 3million to a measly 2million per annum.

These lads will be dragged screaming from their beds yet if they haven't emigrated to the Bahamas or whereever they can't be got at.

I'm with Burton on this. I don't see why they should get more than €350K if the americans are to be limited to getting $500K. I don't understand the Eddie O'Sullivan commission stuff. It should be reduced straight away and the execs should agree to play ball for the sake of their banks and for the image of the country.

Zhou_Enlai wrote:

I'm with Burton on this. I don't see why they should get more than €350K if the americans are to be limited to getting $500K. I don't understand the Eddie O'Sullivan commission stuff. It should be reduced straight away and the execs should agree to play ball for the sake of their banks and for the image of the country.

Would you agree with them giving back money like Arthur Morgan was saying?

Caoimhin O Caoláin on now about pumping the 7bn in when there are low-salaried people on a tiny fraction of that being let go.

Chops getting busted all around.

I don't agree with retrospective laws or the trampling of individual rights to sate the justifiable blood lust of voters.

If they are shown to have breached duties and consequently such bonuses were obtained ilegally then so be it. If not, then let such action be governed by the laws that were in place and legislate for future behaviour.

Auditor #9 wrote:

>Is there an easy way of taping this stuff and uploading it to youtube do you know eoin?

Don't let me put you off the show.

Don't know.
I tried and failed, the time Bertie resigned.

The weasel Frank Fahey is defending the recap now. He's being sent out to defend the govt frequently lately. Hmmm..