The chief actuary with Irish Life has said his hair stood up when he heard the assurance company had transferred billions of euro to Anglo Irish Bank, a court has heard.

Four former senior bankers 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 2008 balance sheet.

Peter Fitzpatrick (63) of Convent Lane, Portmarnock, Dublin; John Bowe (52) from Glasnevin, Dublin; Willie McAteer (65) of Greenrath, Tipperary town, Co Tipperary; and Denis Casey (56), from Raheny, 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 47 of the trial, Bruce Maxwell, who was the chief actuary with Irish Life Assurance (ILA) in 2008, said his understanding of the transactions was that Anglo placed the money with ILP who then lent the money to ILA.

ILA then placed the money with Anglo, he said. He told Úna Ní­ Raifeartaigh SC, prosecuting: "This is not something that would happen normally. ILA were borrowing money. That isn't normal."

He said when he heard about the size of the placements from ILA to Anglo he said “it didn’t make any sense” because “Irish Life would not have had €6 billion to invest in Anglo”.

He added: “When I heard the figure €6 billion my hair raised. Irish Life wouldn’t even have had €6 billion to spare. My initial reaction was €6 million. I said it doesn’t make any sense. We could not have dipped into our own funds”.

He said he was later told that the deposits from ILA were secured by the loans from Anglo to ILP.

"It wasn't our €6 billion at all," he said. The trial continues before Judge Martin Nolan and a jury.