Former chief executive of Bank of Ireland Brian Goggin has contradicted evidence given by Allied Irish Banks about the night of the bank guarantee.
Mr Goggin told the Oireachtas banking inquiry the decision to introduce a blanket guarantee was agreed and known when he left Government Buildings at 3.30am on September 30th, 2008.
He said the two banks were in a meeting at 2am when the decision was relayed to them.
“At that juncture it is my recollection that we were informed a blanket guarantee was being provided. When I left at 3.30 am, there was no ambiguity about what was being done on that night. A blanket guarantee.”
Fine Gael TD Kieran O'Donnell said AIB chief executive Eugene Sheehy had told the inquiry he learned of the blanket guarantee in the media the following morning and thought a four-bank cover would be put in place.
Mr Goggin said he was aware of the evidence given by the former AIB executives. He added: “It was a meeting chaired by the taoiseach. There were two banks there. My recollection is that it occurred when we came back into the room at 2am.”
He said it was his recollection AIB was in the meeting room with Bank of Ireland.
AIB executives have already told the inquiry they left Government Buildings unaware of the decision reached. The inquiry’s chairman Ciaran Lynch later said there was space to bring witnesses back in.
Mr Goggin described the night of the guarantee as the worst of his life. He said former taoiseach Brian Cowen was “very much in charge” on the the night and minister for finance Brian Lenihan was “doing the running around”.
Bank of Ireland had been "put on notice" on September 29th that Anglo Irish Bank was going to default the next day. This was a "grave piece of news to receive", he said, and he knew "something catastrophic' was about to happen.
He confirmed Bank of Ireland had been asked earlier on September 29th to consider taking over Irish Life and Permanent in the scenario where Irish Nationwide and Anglo were to fall. He met two officials from Anglo at 2.30pm that day. “We agreed to meeting as a matter of courtesy. Both the chairman and chief executive came to Bank of Ireland Baggot Street for that meeting.
“The chairman mentioned they had a liability maturing in the amount of €1.5 billion or €2 billion – something of that magnitude – and they were unable to honour that commitment. They asked Bank of Ireland to acquire Anglo. We told them we had no interest. We politely told them we couldn’t be of any assistance.”
Mr Goggin said he knew Anglo chairman Sean Fitzpatrick, had also called AIB but that meeting was cancelled.
He said he and the chairman of Bank of Ireland, Richard Burrows, felt a responsibility to request a meeting with the government about the gravity of what was approaching.
He said Bank of Ireland and AIB told the government at 2am on the night of the guarantee they could provide € 10 billion to Anglo Irish Bank. The mood changed and there was a sense of relief the default of Anglo had been prevented, he said.
Dreadful predicament
Mr Goggin told the inquiry the government was in a dreadful predicament and didn’t have much of an alternative but to introduce a guarantee.
“The entire day and the night of the 29th September was the worst day of my life. The pressure, the stress, the issues I was trying to deal with – it was incredibly stressful and traumatic. As it was for government members and officials.”
He was questioned by Mr O’Donnell about a possible draft guarantee being produced on the night. Mr O’Donnell said the inquiry committee had received minutes suggesting Bank of Ireland and AIB had brought a document to the government. Mr Goggin said he had “no recollection of it” and had made several queries to try to find out whether one existed, but to no avail.
He confirmed he proposed all bondholders be included in the guarantee.
