The FT’s opinion pages on Thursday disclose a cutting series of comments from Patrick Honohan, governor of the Central Bank of Ireland, regarding the role of one entity in Ireland’s financial crisis.

For as the governor wrote in the newspaper:

As the dust settles, it is clear that most of the damage in this crisis – reputational and financial – has been done by just one institution, Anglo Irish Bank. Anglo was taken into full public ownership in early 2009, following the revelation of a number of questionable transactions the previous year. Meeting the bank’s net liabilities, in accordance with the guarantee of September 2008, has already cost the government more than €12bn and is likely to cost about €10bn more. This is a truly shocking figure, albeit one that is affordable for the state.

While the prominent role played by Anglo Irish Bank in Ireland’s crisis, of course, is no secret, it is interesting to note quite this level of public contempt stemming from the central bank governor on the matter.

Not that Honohan has not made his feelings known before, however that was before he was official appointed central bank governor in September 2009.

But Honohan is really making his feelings clear this time around:

The losses reflect a runaway credit binge led by this bank (whose balance sheet grew at an average annual rate of 36 per cent for the 10 years to 2007). All of the other major banks in Ireland, including those that are foreign-controlled, joined the scramble to lend into the property and construction bubble, each concerned – it seems – more with market share than with the risks of a bust.

All of them are now nursing losses, though – aside from one small building society – only Anglo has burned through all of the accounting capital it accumulated at the top of the boom. The new management plans to carve out a small but healthy banking book as a going concern, with a view to Anglo’s subsequent sale. The remainder would be wound down as an asset recovery agency.

Which, of course, is relatively evocative of Federal Reserve chairman Ben Bernanke’s own little — and now infamous — outburst regarding the role played by AIG in the US crisis.

To remind readers, Bernanke said no other episode during the financial crisis had “made him more angry than AIG” while testifying before the Senate Budget Committee in March 2009.

This entry was posted by Izabella Kaminska on Thursday, April 1st, 2010 at 8:50 and is filed under Capital markets. Tagged with anglo irish bank, ireland, Nama, Patrick Honohan. Edit this entry.