A former bank chief accused of conspiracy to mislead investors told gardaí­ that the Financial Regulator told him in March 2008 to support a "green jersey agenda" to protect the Irish banking system.

Four former executives from Anglo Irish Bank and Irish Life & Permanent (ILP) are on trial for allegedly conspiring to mislead investors by setting up a €7.2 billion circular transaction scheme to bolster Anglo's balance sheet.

Willie McAteer (65) of Greenrath, Tipperary Town, Co Tipperary, Denis Casey (56), from Raheny, Dublin, Peter Fitzpatrick (63) of Convent Lane, Portmarnock, Dublin and John Bowe (52) from Glasnevin, Dublin have all pleaded not guilty at Dublin Circuit Criminal Court to conspiring together and with others to mislead investors through financial transactions between March 1st and September 30th, 2008.

On day 64 of the trial, Detective Sergeant Catharina Gunne from the Garda Bureau of Fraud Investigation gave evidence of a voluntary statement provided by Mr Casey, who was group chief executive of ILP from May 2007 until February 2009.

In his statement, completed over a number of dates in 2010, Mr Casey told investigators that in March 2008 he met Pat Neary, chief executive of the Financial Regulator, and John Hurley, Central Bank governor.

‘Vulnerability’

He said: "They spoke about the vulnerability of the Irish banking system in the face of this global crisis and referred in particular to an article which had appeared in the Telegraph newspaper entitled Irish Banks may need life support as property prices crash and which quoted extensively from Professor Morgan Kelly of UCD.

“Either Pat Neary or John Hurley, I cannot recall which, then raised the need for what they described as a Green Jersey Agenda. They spoke of Irish institutions needing to ‘don the green jersey’ and ‘circle the wagons’ to provide each other with mutual support to try to see out the global banking crisis”.

“They requested that ILP participate in and support a Green Jersey Agenda under which Irish financial institutions would provide each other with mutual in-market support at a time of unprecedented turmoil...in order to maintain confidence in the system and protect financial stability.”

Mr Casey told gardaí­ that he would not have authorised any transaction that he knew or understood to be contrary to the wishes of the Financial Regulator or the Central Bank or in breach of company law or which exposed ILP to financial risk.

The jury also heard evidence of cautioned interviews given in 2010 by Mr McAteer, who had been finance director and chief risk officer for Anglo in 2008.

The accused disagreed with investigators that the €7.2 billion deal manipulated Anglo’s balance sheet. He said he was not aware when detectives put it to him that “higher-level executives initiated these transactions”.

Gardaí­ told Mr McAteer: “The buck stops with you with regard to how the accounts are compiled...and presented” and he replied that “the buck stops with the board”, meaning the bank’s board.

Hindsight

He said had believed the billion-euro deals were properly accounted for in Anglo’s 2008 balance sheet. Asked if, in hindsight, these deals should have been brought to the attention of the bank’s board Mr McAteer replied: “I don’t know. They were brought to the attention of the (bank’s) audit committee”.

Mr McAteer told gardaí­ he was not aware of the mechanics of the inter-bank deals.

Mr Casey said the structure of the transaction was not discussed with him. He said he agreed to the deposits in Anglo on condition that they were collateralised.

The trial continues on Tuesday before Judge Martin Nolan and a jury.