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Anglo Tapes

In full: Ex-Anglo exec denies that he tried to mislead the Central Bank

John Bowe, Anglo’s head of capital markets in 2008, insists that recorded exchanges between him and another executive took place “during a period of severe and unprecedented market dislocation”.

THE FORMER HEAD of Capital Markets at Anglo Irish Bank, John Bowe, has insisted in a statement released yesterday that he at no time tried to mislead the Central Bank nor was he aware of a strategy to do so.

Bowe is heard in recordings released by the Irish Independent yesterday discussing with another former executive, Peter FitzGerald, a strategy of convincing the Central Bank to invest €7 billion in the troubled institution but understating the bank’s actual liquidity problems.

In the recordings in September 2008, prior to the bank guarantee, Bowe is recorded as saying: “If they saw the enormity of it up front, they might decide they have a choice. You know what I mean?

“They might say the cost to the taxpayer is too high…if it doesn’t look too big at the outset…if it doesn’t look big, big enough to be important, but not too big that it kind of spoils everything, then, then I think you can have a chance.”

However in a statement released yesterday Bowe said that while he regrets the language, his statements in the recorded calls “were not based upon any awareness whatsoever of a strategy to mislead the Central Bank”.

Here is Bowe’s statement in full:

I categorically deny the allegation that I, at any time, misled the Central Bank or was aware of any strategy to do so.

There were extensive discussions with the Central Bank particularly in or around the time period of September 2008.

The phone call on 18 September 2008 was three days after Lehman Brothers filed for bankruptcy, and therefore took place during a period of severe and unprecedented market dislocation.

To the best of my recollection the discussions with the Central Bank at that time were focussed on obtaining funding for Anglo Irish Bank to enable the bank continue on an interim basis pending a more stable market environment, when the Bank would be able to re-establish other funding sources and repay the emergency funding in time. In effect, what Anglo was seeking was a form of secured bridging finance.

It was envisaged that the relevant period of time would be a number of months before Anglo would be able to access sufficient alternate funding, possibly via the ECB.

It is my belief that the Central Bank was aware that this was the nature of the discussions that were taking place.

All participants in the discussions in September 2008 were fully aware that we were dealing with extreme uncertainty in the markets.

The Central Bank was receiving, at that time, detailed data from the Bank on a daily basis in addition to short term cashflow projections. The Central Bank was also at that time conducting detailed and extensive due diligence on Anglo’s loan book through professional advisers engaged on their behalf.

The matters discussed in the telephone calls that were broadcast and published this morning, relate to an envisaged Emergency Liquidity transaction that did not take place, and to the best of my recollection there was no further substantive discussion on this issue in the week leading up to the bank guarantee on 30 September 2008.

In hindsight, I deeply regret that the language and tone I used in these internal bilateral telephone calls was both imprudent and inappropriate.

I also wish to highlight that I was not a member of the executive management board of Anglo Irish Bank in 2008, and therefore I was not a decision maker in relation to either the Bank’s requirement for funding or negotiations with the Central Bank.

Further, my statements were not based upon any awareness whatsoever of a strategy to mislead the Central Bank.

Read: ‘Anglo tapes show need for banking inquiry’ – man who wants to run inquiry

Read: Anglo tapes ‘should be handed over to the Gardaí’

The Anglo Tapes: 9 jaw-dropping quotes from before the bailout

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