34 2 mins 8 yrs

Anglo-Irish-Bank-LogoThe Irish people were looted of tens of billions to bail out Anglo Irish bank, and it was done on the basis of lies and trickery. The Irish Independent newspaper has published secret recordings from 2008, which reveal two senior Anglo Irish executives – John Bowe, then head of capital markets, and Peter Fitzgerald, the former head of retail banking – spilling the beans.

In essence, John Bowe knew that the 7bn euros asked for in a bailout was nowhere near enough, and that the real bailout required was much higher. At the time, the 7bn requested was, he said, a figure “picked out of my arse”. The strategy was to play the government for total suckers, lure it and central bank in, to ensure “they had skin in the game”, so that when the full extent of the black hole was revealed the bailouts had to continue. It worked and the Irish people were looted of 30bn euros.

How could it be that billions of taxpayers money was commited without thorough and rigorous audits? Well this is how government spends money all the time. Yet again, Milton Friedman is proven right in that spending other people’s money on somebody else (which is all government spending) is the worst possible way of handling money. Those doing the spending have no care for the money or for what it buys.

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34 thoughts on “ANGLO IRISH BANKERS “TRICKED” GOVERNMENT INTO BAILOUT

  1. And a full five years later, not a single bankster has seen the inside of a prison cell. True banana republic stuff.

  2. The executives at the top of Anglo Irish were about as ugly and vicious a coterie as capitalism can throw up.

    After granting vast uncollateralised loans to the construction industry, their CEO went on to issue himself a loan of over E 100 m to buy shares, and then defaulted on repayment, one of the factors that precipitated the bank’s collapse. Even when the bailout (I think the state has shovelled around E 30 bn into the bank) almost bankrupt the country, he still refused to apologise to the Irish people for any wrongdoing, suggesting instead that the funds could be found if we slaughtered the “sacred cows” of Irish society: benefits for children and the elderly and health care.

    If they were in the US, they’d all be in prison now.

    One of the many remarkable things in this story is how successfully they kept even private experts and auditors in the dark. Merrill Lynch attested that the bank was in good financial shape just a week before it had to be nationalised, and the consultants Oliver Wyman were saying as late as 2008 that Anglo Irish was “the best bank in the world”!

  3. In 2007 Shane Ross (now a TD) was saying Sean Fitzpatrick should be Minister for Finance!

  4. Peter

    You don’t go,th jail for making bad decisions in a real country. On what grounds should Irish or British or US bankers go to jail? Be specific.

    As I’ve said many times, I will never understand why the Irish govt guaranteed -all- bank debt. There was never any moral or legal or practical duty to do anything like that. The govt ministers were in over their head.

  5. Phantom — You’re off your rocker these days. First Snowden is a ‘traitor’ and now the bankers are merely guilty of poor judgement. Jesus wept!

  6. Tell me what specific laws or regulations the bankers broke.

    We know bad things happened. But you don’t go to jail for making errors, or for doing stupid or even irresponsible things that are not illegal.

  7. Putting aside that fiat money is a gigantic fraud, it seems that the Irish Independent has presented a prima facie case of fraud here.

    But then again, maybe the Irish Independent “has betrayed the country”, what with blowing the gaff on the powers that be.

  8. The Indo has often acted as a shill for the powerful; both in government and society generally. In this case they’ve broken a really important story and I take my hat off to those involved.

  9. Pete

    You oppose all regulation and will always be the ” Banksters Best Buddy ” . You would let them run wild.

    Petr

    What is described there, if the charges are true, would be .000001pct of the Irish crisis.

    The larger causes in Ireland would include a lack of property development planning and bank supervision, and the complete relaxation of lending standards.

    In the US, add the securitization of mortgages to that list, a new thing , not regulated in the US or UK.

  10. According to Paul Williams on viny b they have had these tapes for over three months and more to come in the next few days!!

  11. By sheer chance, I posted this yesterday. Today, the post and the linked report stand vindicated. Phantom however, looks like the appeaser of banker larceny that he is:

    Allan@Aberdeen, on June 23rd, 2013 at 7:42 PM Said:
    Phantom – I’ve said here for some time now that the muslim ‘terrorist’ is over-rated, and somebody agrees :
    http://www.guardian.co.uk/commentisfree/joris-luyendijk-banking-blog/2013/jun/19/banking-britain-beyond-control

    Before studying bankers I spent many years researching Islam and Muslims. I set out with images in my mind of angry bearded men burning American flags, but as the years went by I became more and more optimistic: beyond the frightening rhetoric and sensationalist television footage, ordinary Muslim people go about their day like all other human beings. The problem of radical Islam is smaller and more containable than Islamophobes believe.
    With bankers I have experienced an opposite trajectory. I started with the reassuring images in my mind of well-dressed bankers and their lobbyists; surely at some basic level these people knew what they were doing? But after two years I feel myself becoming deeply pessimistic and genuinely terrified. This system is highly dysfunctional, deeply entrenched, and enormously abusive, both to its own workers and the society it operates in. The problem really is exactly as bad as the “banker bashers” believe.

  12. Allan

    How would you regulate banks differently?

    Criticism is easy, solutions require specifics.

  13. On what grounds should Irish or British or US bankers go to jail? Be specific.

    For starters, reckless trading and false accounting on a colossal scale. Then there is selling dud payment protection insurance to customers who were never going to be able to claim. Then there is libor rate fixing. Now it seems that foreign exchange rate fixing is also in point. Then there us selling dud interest rate swaps to small businesses. Then there is money-laundering and facilitating the drug traders.

    Apart from all that, nothing at all.

  14. What does ” reckless trading ” even mean? Trading that results in a loss? You do not go to jail for losing money.

    What does money laundering – a genuine crime – have to do with the financial crisis?

    What does LIBOR have to do with it?

  15. Phantom – the entire system is criminal because only criminals can succeed within it. Your attempted defence of the banking system reminds me of trying to halt the incoming tide on a beach with spade and sand when I was a child. Moreover, any last vestiges of integrity which some here consider you to have are disappearing down your plug hole. Just look at your responses on this thread alone – utterly desperate and pathetic.

  16. Ah, Allan spits nails, but proposes no solutions. Because he has none. Solutions would require reflection and study of the issue.

    So much easier to critcize the ” Jew Banksters “

  17. Phantom – more diversion, but here’s a solution. Creation of money as usurious debt must end. That way, money created by the central bank will not be loaned at base rates to the commercial cartel for them to fractionally reserve upwards and at usury thus taking more money out than was put in as loans to the real economy. Instead, money shall be created by the central bank and used for public construction – motorways, harbours, railways, building infrastructure etc. The money enters the economy through the contracts to the construction sector and to the workers’ wages, and there would be no inflation.

    Why no inflation? Take the case where the UK needs another tunnel to Europe, to Holland for example and it costs £20 billion. The economic benefits are estimated at £22 billion. Then the government should simply create the money because the demand (the future economic benefits) will at least equal the supply (the newly created money) thus ensuring no inflation noting that there is no interest on the government’s own money.

    This way, there is no ‘banking sector’: they’re simply not needed. The criminals just don’t exist because their sector doesn’t exist. The crooks and shysters will have to work for a living.

  18. Allan

    You little socialist you

    Who would own your ” central bank ” ? Who would control it? Who would decide what enterprise is worthy of a loan and which is not?

    Would a central bank lend money to a speculative venture such as the nect Apple, Tesla cars, etc?

    Your system is a backwards looking Brezhnev style command economy that sounds like it would be more susceptible to manipulation by factions than what we have now.

  19. The US has not locked up those most responsible for the financial debacle, just little fish in the shallows. The big fish are the people who knowingly created bum securities and peddled them around the world and the top executives who knew, or should have known about the matter.

  20. How dare you talk about true causes?

    Don’t you know that everything is due to the Community Reinvestment Act, like Sean Hannitty said, or due to the Fed like Ron Paul said?

    You actually researched this matter? That’s frowned upon here, sir!

  21. Phantom – the central bank is the creator of the money as it is at the moment. The difference is that the created money will not be loaned at base rate to commercial banks thus allowing them through usury and fractional reserve ‘magic’ to fleece the real economy, but will instead be used interest-free for necessary public investment. Banks in the commercial sector will receive customers’ money but not huge amounts from the central bank – which is controlled by the private cartel anyway.

    Btw, have you listened to the recordings of the Irish bankers? If not, I suggest that you do so. You shall hear bankers laughing as they bring Ireland to bankruptcy.

  22. Who would own this new ” Central Bank ”

    Your proposal is a huge step to a Command and Control economy.

    Be aware that all will not agree on what is ” necessary public investment ” . Who decides among competing claims for money?

    Who runs this bank and who owns it?

    I will listen.

  23. Phantom – the people laughing at Ireland’s demise are ‘financial experts’. These are the people whom you admire – the Jamie Dimons of Irish banking. It’s fun destroying a country’s finacial security: just listen to the laughter. Your people in action.

  24. Allan

    How are they my people?

    You still haven’t explained my questions about your Soviet Central Banking system.

  25. Phantom if pretty much every major index is rigged, commodities are toll boothed, desired ratings are simply bought and the money supply is run by a private cartel we already have a command and control economy.

    Your shining examples of market success are the same as those of 100 odd years ago. A phone and a car. Wonderful.

  26. No you absolutely do not.

    There are still many examples of successful, creative / disruptive technologies that were risky at the time and which no central government would have funded as a business. Examples are many, including the personal computer you now type on. No government central facility would loan money to then uncertain ventures such as Apple, Microsoft, Google. Or to Under Armour sportswear, to the developer of a new lasik technology, or to that new restaurant in town.

    All these firms create and hire if they succeed, and they also disrupt existing businesses. Thats the way it is, and its OK. But no single source Brezhnev era facility like Allan wants would tolerate it.

    His cure would be worse than the disease.

  27. It’s even worse than I’d thought, and I thought that things were really bad. On opening Pete’s link and then going a bit further, there’s this:

    http://www.independent.ie/business/irish/abuse-the-bank-guarantee-dont-get-caught-david-drumm-29369275.html

    Now play the above because if the originals in Pete’s link didn’t persuade you that the CEOs of the banks are sociopaths, this surely must.

    Sociopaths are recognisable by:

    1.failure to conform to social norms with respect to lawful behaviors as indicated by repeatedly performing acts that are grounds for arrest;
    2.deception, as indicated by repeatedly lying, use of aliases, or conning others for personal profit or pleasure;
    3.impulsiveness or failure to plan ahead;
    4.irritability and aggressiveness, as indicated by repeated physical fights or assaults;
    5.reckless disregard for safety of self or others;
    6.consistent irresponsibility, as indicated by repeated failure to sustain consistent work behavior or honor financial obligations;
    7.lack of remorse, as indicated by being indifferent to or rationalizing having hurt, mistreated, or stolen from another;

    I’m no psychologist but I can read, and the above looks rather like the behaviour typical of bank CEOs. Now how much debt are they in and how do they attempt to get others to pay for it?

  28. –would never tolerate – the competition and the disruption to existing firms, funded by the same central bank

    Allan’s plan involves a built in conflict of interesr, as that bank would not want competition with those to whom it has lent money

  29. Phantom – have you listened to the recordings of the CEOs of Allied Irish bank CONSPIRING as to how to loot the Irish taxpayers and bankrupt the country?

  30. I oppose that.

    I opposed the manner of the Irish bank bailout also, and have said so here for years BTW

  31. Phantom – when you do get round to listening to the recordings of the telehone discussions between the CEOs of Allied Irish Bank, would you agree with me that these CEOs are a) sociopathic as in my post at 12.11am and b) that they conspired to loot Irish taxpayers and bankrupt the country OR do you consider that there was an altruistic motive behind their intentions which the recordings didn’t capture?

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