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Saturday 3 December 2016

Anglo bank staff ushered customers to back rooms to avoid panic over queues

Peter Fitzgerald
Peter Fitzgerald

Anglo Irish Bank staff ushered customers off the street into back rooms so the public would not see them queueing outside in the wake of the bank shares collapse.

Peter Fitzgerald, former Director of Corporate and Retail Treasury at Anglo, told the Banking Inquiry there had been an unprecedented rush to withdraw money when the shares collapsed on St Patrick's Day in 2008.

As customers called to withdraw money, the staff moved them into meeting rooms at the back of the building "to avoid precipitating a crisis by people seeing a queue outside the bank on St Stephen's Green".

The run on the bank lasted for about four days until the Financial Regulator announced an investigation into short-term selling which then caused the share price to rise and the withdrawals to stop. Mr Fitzgerald stressed, however, that the collapse of Lehman Brothers six months later on September 15 was "the final event that shook the confidence of customers in the safety of their savings".

CONTROVERSIAL

The Inquiry also heard how former Taoiseach Brian Cowen and Anglo chairman Sean FitzPatrick met in the private home of Anglo non-executive director Fintan Drury before their controversial Druids Glen golf outing.

It had previously been believed that this meeting was over coffee at the golf club before the game.

Gary McGann, a former non-executive director of the Bank, who was also present at the meeting, along with economist Alan Gray, said it had been held in the home of Mr Drury.

The controversial game took place in Druids Glen on July 23, 2008, just months after a catastrophic collapse of Anglo Irish Bank shares.

Mr McGann insisted that the group had not discussed banking "because it wasn't on the agenda". The discussion was a general one about the economy.

He said the group had met again for dinner in the golf club restaurant that evening.

Businessman Sean Quinn's Contracts for Difference with Anglo Irish Bank were among the "factors that seriously compounded the risks" for the bank, Mr McGann told the committee.

Mr McGann, who was a non-executive director of Anglo from 2004-2009, stressed that the Financial Regulator routinely had reports from the bank and was fully briefed from the outset on the Quinn CFD's and the banks efforts to deal with them.

Matt Moran, former Chief Financial Officer of Anglo Irish Bank, said the bank's position was complicated by the rumours of businessman Sean Quinn's economic interest.

The Financial Regulator also came in for criticism from former Group Chief Executive of Irish Life and Permanent plc, David Went. "In general, it is my view that the Regulator failed to fulfil its prudential function," he added.

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