Mr Desmond Traynor was a clever and skilful man who would have exploited the limits of the law to arrange things to his advantage, a former general manager of the Central Bank told the inquiry.
He met Mr Traynor only twice, Mr Timothy O'Grady Walshe recalled: "I suspect that if he were here today to unravel things, he would make a good job of proving that what he was doing was within the law."
He would not have seen his offshore back-to-back loan activities as being outside the law, he was certain, but would "utilise things to the very limits".
Mr O'Grady Walshe was being questioned by Mr John Coughlan SC, for the tribunal, who asked what his response was when he learned that Mr Ken O'Reilly-Hyland, a director of the Central Bank, had a loan with Guinness & Mahon secured by deposits in an offshore affiliated bank. The loan amounted to £583,000. Had he informed the governor, Mr Charles Murray, and if so, was the matter raised by him with Mr O'Reilly-Hyland?
He did not know what the governor might have done, responded the former Central Bank executive. As the regulatory bank, the Central Bank's functions were limited to the supervision of licensed banks. It had no role in connection with the affairs of any individual customer. Unlike the Central Bank's head of banking supervision, Mr Adrian Byrne, however, Mr O'Grady Walshe did not believe it would have closed Guinness & Mahon if the guarantee of the Irish bank's liabilities had not been forthcoming from its London parent.
It was common for a regulatory bank to seek such assurances from the parent of a bank trading in its jurisdiction, as in the case of Guinness & Mahon: "Many parent companies do not want to give guarantees, because it would be reflected in their own accounts."
In the event, all it got from Guinness & Mahon, London, was an assurance that it was "standing over the liabilities" of the Irish subsidiary: "That was the best we could get. We were used to settling for that."