The Financial Regulator told bank executives it was time to "wear the green jersey" in early 2008, a former director from AIB bank has told a jury.
Four former senior bankers from Anglo Irish Bank and Irish Life and 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.
Denis Casey (56), from Raheny, Dublin, Peter Fitzpatrick (63) of Convent Lane, Portmarnock, Dublin, John Bowe (52) from Glasnevin, Dublin, and Willie McAteer (65) of Greenrath, Tipperary Town, Co Tipperary 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 57 of the trial John O’Donnell, who was group finance director of AIB in 2008, told Úna Ní Raifeartaigh SC, prosecuting, that he attended a meeting with the Financial Regulator in 2008.
He said the regulator was raising concerns that Irish banks were not supporting each other like banks in other jurisdictions.
“He basically said it was time for us to wear the green jersey,” Mr O’Donnell testified. He said he wasn’t sure when this meeting took place but he would guess it was in early 2008.
No specific interpretation
He said no specific interpretation of the regulator’s comments was provided but the suggestion was that Irish banks should help each other extend the duration of their liquidity and the maturity of inter-bank liquidity.
He said in March 2008 he played a game of golf with Matt Moran, Anglo's then chief financial officer. After the game Mr Moran approached him in the car park, the witness said.
Mr Moran asked Mr O’Donnell if AIB would be agreeable to a situation where Anglo placed money with AIB, AIB transferred that money to AIB Investment Managers and this third party put the money back on deposit with Anglo.
He told counsel that the significance of the deposit coming from the Investment Managers was that the company was not a bank and so the deposit would not appear as an inter-bank placement.
Mr O’Donnell said he later telephoned Mr Moran to clarify the request and said it would be inappropriate to involve AIB Investment Managers as it would potentially involve shareholders in AIB.
He said the request was discussed at a meeting of the AIB group executive committee on March 27th, 2008. He said he later contacted Mr Moran to tell him the request had been rejected.
The trial continues before Judge Martin Nolan and a jury.
