Tuesday 19 March 2019

Central Bank 'shower of clowns' said Drumm before getting handout

Former Anglo Irish Bank chief executive David Drumm
Former Anglo Irish Bank chief executive David Drumm

Former Anglo Irish Bank chief executive David Drumm described the Financial Regulator as "f**king Freddie f**king Fly" and the Central Bank as a "shower of clowns" before getting emergency funding during the financial crisis, a jury heard.

In phone recordings made at Anglo in 2008, Mr Drumm was heard telling a colleague that he would go to the Central Bank and "keep asking the thick question: when is the cheque arriving?"

Mr Drumm also described a letter to the Financial Regulator stating that the struggling bank was in breach of the liquidity conditions of its banking licence as a "death warrant".


The tapes were being played in the trial of Mr Drumm, who denies conspiracy to defraud and false accounting charges.

He is pleading not guilty to conspiring to defraud Anglo investors in 2008 by dishonestly creating the impression that customer deposits were larger than they were.

He is alleged to have conspired with former Anglo officials Willie McAteer and John Bowe, as well as then-chief executive of Irish Life and Permanent (ILP), Denis Casey, and others.

Mr Drumm also denies false accounting by providing misleading information to the market.

The case centres on a series of circular billion-euro inter-bank transactions between Anglo and ILP, routed through Irish Life Assurance.

The money was placed back in Anglo and treated as customer deposits, which are considered a better measure of a bank's strength.

Mr Drumm admits he auth- orised the transactions but denies there was anything dishonest or fraudulent in them.

Det Sgt Michael McKenna, who was involved in the investigation, agreed with Paul O'Higgins, prosecuting, that it had emerged there were certain telephone recordings.

Calls were recorded in treasury and other areas that were kept and were still in existence, he said.

One of the phones that was recorded belonged to a senior treasury department official, John Bowe, and some of the calls on that phone became relevant to the proceedings.

The jury first heard a call between Mr Bowe and officials in the Financial Regulator, on September 18, 2008, followed by a call with John Cronin of McCann Fitzgerald Solicitors.

This was followed by a call between Mr Bowe and Mr Drumm in which Mr Drumm said "the rumour is going around that they're trying to merge", referring to other financial institutions.

He then said: "It would never be allowed politically." They had 30,000 to 40,000 employees between them, and for half of them to lose their jobs was "not palatable" for the country.

"William didn't give me any confidence this morning but he didn't tell me anything that I didn't expect," he said.

The two men spoke about Anglo being a "hard sell", and Mr Drumm said he did not know "what you would describe it as ... a f**king stallion".

Mr Bowe read out to Mr Drumm a letter he had prepared for the Financial Regulator about Anglo's breach of the regulatory liquidity ratio under the bank's licence. The jury had heard earlier this was in advance of Anglo seeking emergency funding.


"The bit about the licence is signing a death warrant," Mr Drumm said. He also told Mr Bowe that Anglo was "still f**ked" despite "Mr F**king Denis" of Irish Life and Permanent telling him the bank would be "looked after".

In a call on September 19, 2008, Mr Bowe told Mr Drumm about the bank's position "deteriorating more slowly than our worst case scenario".

They then discussed getting cash - €6bn - from ILP. "We can't take it off f**king Freddie f**king Fly down there, the Financial Regulator, because it will appear on the balance sheet," said Mr Drumm.

Mr Drumm spoke of what they would say to the Central Bank. He referred to the bank as being under stress.

The trial continues.

Promoted articles

Entertainment News