A former non-executive director at Anglo Irish Bank has told a jury that "excellent people" were sourced by the bank to carry out "healthy checks and balances" during the financial crisis of 2008.
Michael Jacob told David Drumm's conspiracy-to-defraud trial that financial reporting evolved at this time and Anglo took measures to ensure that things were "done properly".
He was giving evidence on day 52 of Mr Drumm’s trial at Dublin Circuit Criminal Court.
Pleaded not guilty
Mr Drumm (51), of Skerries, Dublin, has pleaded not guilty to conspiring with former bank officials Denis Casey, William McAteer, John Bowe and others to defraud depositors and investors at Anglo Irish Bank by "dishonestly" creating the impression that deposits in 2008 were €7.2 billion larger than they were.
The bank’s former chief executive has also pleaded not guilty to false accounting on December 3rd, 2008, by furnishing information to the market that Anglo’s 2008 deposits were €7.2 billion larger than they were.
The accused accepts that multi-million euro transactions took place between Anglo and Irish Life & Permanent (ILP) in 2008 but disputes that they were fraudulent or dishonest.
Mr Jacob told Tessa White BL, defending, on Wednesday that Anglo asked finance firm PWC to carry out a review of the workings of the bank’s audit and risk committees in 2008, to ensure there were no overlaps or gaps.
“There were a lot of people looking at the same trough, so to speak,” he said.
He said Anglo’s directors believed the bank should get an independent body to scrutinise its operations and ensure it was adhering to best practice.
‘Exceptional time’
Mr Jacob told the jury it was “an exceptional time” in international finance because very significant companies disappeared overnight.
“The extent to which this impacted on a bank’s funding was quite extraordinary. The board were very conscious of the very, very difficult situation that was prevailing,” he said.
Earlier he told Sinead McGrath BL, prosecuting, that he attended a board meeting on October 24th, 2008.
He said he did not recall any discussion about the reference to Anglo’s transaction with ILP, which was documented in a PWC report that was circulated to directors at this meeting.
“The report simply recorded that the transaction occurred – that was actually the first time we saw the ILP transaction,” he said.
The trial, now in its 10th week, continues before Judge Karen O’Connor and a jury of 10 men and four women.