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Abuse the bank guarantee - How can we ever trust banks again?
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June 28th, 2013
This made German news and everyone is outraged. It’s an incredible story. What do you think about it?
‘Anglo Irish Bank boss David Drumm laughed about “abusing” the bank guarantee and warned his executives not to be caught abusing it, the Anglo Tapes reveal. Drumm is also heard giggling as one of his executives sings the German national anthem as deposits from Germany flow into Anglo as a result of the bank guarantee. It’s the first time the former Anglo chief executive is brought directly into the controversy. His language and casual attitude to the crisis will be found extraordinary by readers. The latest revelations from the Irish Independent’s ‘Inside Anglo’ investigation display a casual, even reckless, attitude at the bank during the financial crash. Mr Drumm can be heard laughing at the financial regulator’s concerns about being seen internationally to be “abusing” the bank guarantee in late 2008.
“We won’t do anything blatant, but . . . we have to get the money in . . . get the f***in’ money in, get it in,” he tells his senior manager, John Bowe.
At the time, European leaders including Germany’s Angela Merkel and UK chancellor Alistair Darling were alarmed at how the guarantee could affect their banking systems. But Mr Bowe sang a “comedy” version of the anthem ‘Deutschland Uber Alles’ and talked about giving “two fingers” to British concern. Mr Drumm and Mr Bowe are heard laughing at the concerns that the movement of money was causing a rift between Ireland and its EU partners.
Drumm declares to his colleague: “So f***in’ what. Just take it anyway . . . stick the fingers up.”
In an earlier recording, Mr Bowe laughed with another colleague, Peter Fitzgerald, about nationalisation of the bank. They described the prospect as “fantastic” – so that they could keep their jobs and become civil servants. This is the second tranche of conversations to be published by the Irish Independent, revealing an astonishing banking culture in the collapse of late 2008. Yesterday, we revealed how Anglo executives who negotiated with the Central Bank lied about the true extent of losses at the institution in the hope the State would write them an open cheque. The publication of the Anglo Tapes sparked fresh calls for a comprehensive banking inquiry across the political spectrum.’
‘Angela Merkel’s ally reacts to taped phone calls of Irish bank executives laughing about German largesse. The fallout from the Anglo Irish Bank tapes with executives singing “Deutschland über Alles” while joking about German money rescuing the financial institution has provoked disgust in the country, a senior ally of chancellor Angela Merkel has said. Michael Fuchs, deputy leader of Merkel’s Christian Democratic Union party in the Bundestag, described the recordings as “unbearable”. In a series of phone calls senior bankers at the toxic, debt-ridden bank laugh about German largesse on the night the Irish government rescued Anglo Irish Bank from collapse with large injections of cash from European partners including Germany.
The outrage in Germany is deeply embarrassing for the current Fine Gael-Labour coalition in Dublin as the government seeks to reduce the Republic’s debt burden to the EU, the European Central Bank and the IMF. Fuchs told RTE radio on Wednesday: “We are offended. If you have a feeding hand you shouldn’t bite into it.”
He added “it’s really dangerous” language as German politicians are trying to convince local taxpayers to support European countries, such as Ireland. “It’s absolutely unbearable that somebody is talking like this.”
In one conversation – taped just two days after 30 September 2008 bank guarantee – Anglo Irish Bank’s disgraced former CEO David Drumm giggles while his colleague John Bowe recites lines from “Deutschland über alles”.
Bowe accepted in a statement that the language used in the taped recordings of internal bank conversations “was imprudent and inappropriate”.
The behaviour of the Anglo Irish executives has turned them into national hate figures in the Republic and now, it appears, also in the country which has supplied most of Europe’s money to prop up not only the Irish banking system but also the entire state. As Anglo Irish Bank moved towards the fiscal abyss, Drumm is heard joking, “another day, another billion”, referring to the flight of deposits out of the doomed bank before the bank guarantee in September 2008. At the time the outflow was running at over €1bn (£847m) a day. Meanwhile Irish prime minister Enda Kenny has said he may have to seek a referendum asking the Irish people for greater government powers to investigate the banking crash that almost bankrupted Ireland. The tapes appear to confirm that Anglo Irish bankers hoodwinked the then Fianna Fáil – led government back in 2008 with a vastly underestimated price for the bank rescue. John Bowe, then the bank’s director of capital markets, is heard on the tapes explaining where got the figure of €7bn needed to save Anglo Irish from oblivion.
He quips that he picked the figure “out of my arse”. In fact, Anglo Irish Bank’s rescue cost the Irish and European taxpayers, particularly the Germans, €30bn.’
http://www.guardian.co.uk/business/2013/jun/26/anglo-irish-tapes-germany-offended
I wonder, how many top bankers are actually decent people?
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