The chairman of AIB, Mr Lochlann Quinn, has made it clear that his support for chief executive Mr Michael Buckley is conditional on the executive being cleared by the bank's internal inquiry into how one of its trader lost €691 million (£544 million).
Citibank - the giant US bank - has confirmed that it is to investigate allegations that Mr John Rusnak, the currency trader accused of defrauding AIB, colluded with one of its own currency dealers.
The move is in response to a report that investigators looking into the alleged fraud at AIB's Allfirst subsidiary in Baltimore have found emails on a computer used by Mr Rusnak showing he received help from an apparent Citibank accomplice.
Citibank said: "We've been co-operating with AIB and their auditors in their efforts to account for their transactions between Allfirst and Citibank. Allfirst has not raised with us any evidence or allegation of collusion.
"Obviously, any such allegation would be taken very seriously."
Investigators are reported to have recovered deleted emails from Mr Rusnak's computer in which a Citibank employee warned Mr Rusnak that the cover-up of his scheme could not continue.
AIB said last week the scheme had gone on undetected since 1997 and had cost the bank $691 million (€789 million).
Speaking at the weekend Mr Quinn voiced support for Mr Buckley, who was in charge of the bank's capital market division for some of this time.
However, Mr Quinn said that although there were no indications that major shareholders were unhappy with Mr Buckley, he did not want to pre-judge the outcome of the banks investigation.
Mr Eugene Ludwig, a senior US banker, is carrying out the investigation and is expected to report back early next month.
Sources close to Mr Quinn said it was not possible for him to be more unequivocal in his support for Mr Buckley, until the investigation was concluded. The chairman characterised the evidence of external collusion as "straws in the wind," in comments made to The Sunday Times.
Citibank, which is a subsidiary of Citigroup, declined to comment further on its relationship with Mr Rusnak. However, traders say it provided him with so-called prime brokerage facilities.
These included such services as settlement and clearing for trades and trade execution.
It is also believed Citibank was one of the counterparts to whom Mr Rusnak sold so-called deep-in-the-money options.
These options, which AIB says he never disclosed, allowed him secretly to raise large amounts of cash to cover losses he incurred in spot and forward foreign exchange markets.
- (Additional reporting by the Financial Times.)
