Bowler's view

When Anglo Irish Bank went into meltdown it emerged that Irish Life & Permanent had transferred €7.45 billion to the failing bank to temporarily boost the bank’s balance sheet.

Chairman of IL & P at the time, Gillian Bowler, said she was unaware of the transaction.

Bowler is still widely admired in financial and media circles despite this amazing admission of incompetence.

Ms. Bowler, however, had much more to say to Marian Finucane recently (Sunday 16th January) regarding the circumstances surrounding certain transactions between IL & P and the NTMA.

I think this conversation is worth putting on the record.

Bowler: In May 2008 the entire board of Irish Life & Permanent was invited to meet the regulator and it was suggested that there would be a Green Jersey agenda, that all banks would help each other. We said, well, there’s no sign of that, there had been phone calls about that before but there was no sign of it actually happening.

Finucane: This was May 2008:

Bowler: Yes, the entire board was called to the regulators office to discuss the Green Jersey agenda. At the end of it we said we’re not even getting support from our own NTMA, Central Bank whatever you like and they said: Yes, we know that but we’ll see what we can do but really yourselves, AIB, BOI and EBS should be helping each other. We said; fair enough, we’ll go off and do that.

Finucane: What does that mean?

Bowler: Liquidity wise, instead of placing your money, and it’s billions, overnight in Bank de Paris or City Bank which is commonplace, I could give you a list of five banks that we would have used, that we would put the Irish banks first and we started to do so and then we were told that we would need to put, quite rightly, a commercial proposition before the NTMA and so we have what’s called bundles of collateral which is mortgages and securitisations and we gave €250 million.

Well, we gave more than the value because when you give collateral you always give more than the value because there’s a haircut. It’s a discount and in return we got a €250 million deposit which we talked about openly at the time. I think we announced it in our half year results, I could be wrong about that but there was no secret about it, it was above board collateral.

Finucane: Had the NTMA been reluctant to so do, because the article says they were reluctant to so do and that the Dept. wanted them to do it and was why it was decided, did they go to Paribas to put up the proposal for Irish Life & Permanent.

Bowler: I don’t know, I’m only guessing but I would suspect because Somers was extremely successful in running the NTMA…whereas the Regulator, Central Bank and maybe the Dept. of Finance and I’m only speculating because I don’t know this would say – Look, if you can give 10% of the money closer to home it would help them with the liquidity because it was starting to become very tight at that stage. So in return we gave the collateral, it was signed up legally and we made the presentation to the NTMA which we were required to do and subsequently were granted the money which I have to tell you in banking terms is €250 million.

According to an article in the Sunday Independent the existence of such an officially sanctioned support scheme (Green Jersey Agenda) has always been vehemently denied by ministers and officials.