From the Irish Life & Permanent statement (emphasis ours) detailing its loans to Anglo Irish:
Friday 13th February 2009. The Board of Irish Life & Permanent plc met last evening to discuss transactions which took place during 2008 between companies in the Group and Anglo Irish Bank.
It was noted that the Financial Regulator had communicated to the Non Executive Directors of the Board in person last May that it was a policy objective of both the Central Bank and the Financial Regulator that Irish financial institutions would work to support each other in the face of an unprecedented threat to the stability of the Irish financial system arising from the international credit crisis.
However, the Board has expressed its strong disapproval of and disappointment with some of the specific measures used to support Anglo Irish Bank during 2008 and the fact that the Board itself was not informed of the specific manner in which such support had been afforded to Anglo Irish Bank.
Those “specific measures” of the €7.45bn loan Irish Life loan to Anglo not really being defined in today’s statement.
Irish finance minister Brian Lenhihan, however, has said that he was “advised that Anglo Irish placed funds with Irish Life & Permanent. A non-bank subsidiary company of Irish Life & Permanent then deposited a similar amount in Anglo as a customer deposit”.
By treating what was really an interbank loan as a customer deposit, Anglo Irish, bankers speculate, was able to improve its loan-to-deposit ratio right before the end of its financial year. For its part, Irish Life said today the transactions were “correctly accounted for as interbank deposits” in its interim accounts.
Nevertheless Irish Life’s finance director, Peter Fitzpatrick, and head of group treasury, David Gantley, have resigned overnight. Interestingly, the company declined the offer of resignation by CEO Denis Casey. A healthy dose of Irish hospitality there too?
Related links:
A friend in need – FT Alphaville
Irish Life finance director resigns – FT