Monthly Archives: August 2013

The rise and fall of Anglo Irish bank has made some names famous, and others infamous. To help identify the aiders and the culprits of the complex situation unfolding in Ireland’s financial industry, below is a list of the main players in the events and where they stand now.

On the side of famous, we have Mike Aynsley, a strong financial figure with a seemingly clear idea of the situation. On the side of infamous, we have John Bowe and David Drumm, brought into the public awareness because of the leaked tapes of their conversations to the press.

Mike Aynsley

The Australian financier was brought into the fray as CEO to try and alleviate some of the bank’s issues and bring it back under control. He was successful in his bid to reduce the bank’s assets that lay in loans, bringing it from an uncontrollable €115 billion to a more manageable €14 billion. He also brought in €10 billion through the sale of the US assets of the bank.

Aynsley was able to bring the bank into solvency, but the decision of the government to make the bank liquidate may have undermined his hard work. The solution remains to be seen, but Aynsley has returned to his native Australia.

John Bowe

The banking executive was brought from virtual nonexistence in the public eye to the forefront of the Irish press’s interest in the Anglo Irish debacle. The internal telephone conversations between himself and his colleagues at the bank were published earlier this year, and they were less than flattering.

His most pertinent statement was perhaps on the €7 billion loan from the government to salvage the bank. “I picked it out of my arse,” he can be heard saying of the figure that costs the taxpayer more than a pretty penny.

Currently, Bowe is away in Istanbul, attempting to rein in some of the loans that the bank made to balance the books a little better.

David Drumm

Formerly the Chief Executive Officer of Anglo Irish before Aynsley, Drumm was replaced because of the spectacularly unwise comments he made on the leaked tapes. Within the space of a few short months, Drumm realised that the bank’s loans from the Central Bank were not enough to save it due to his misjudgement, and he turned to threats to resolve the situation.

His planned words to the Finance Minister Lenihan were: “What’s this about having to go through due diligence? You made that decision on the 29th of September. You’ve told world we’re all solvent. Now can you protect your hundred billion guarantee of us by writing a two or three billion cheque and get on with it.”

His unwieldy attitude towards the bank and towards the finance regulators led to this dismissal from the bank, and his condemnation by the public and the financial industry.

To keep up to speed on the situation at Anglo Irish Bank, please read my other posts and take a look at my Slide Share.


Michael Noonan, the force behind the liquidation of IBRC/Anglo Irish bank, evaluated the promissory note needed for the bank’s liquidation at €25 billion.

Mike Aynsley, former Chief Executive Officer and expert brought in to resolve the situation, estimated a higher amount of €28 billion.

So what will happen to the €3 billion excess not accounted for?

Unfortunately, it looks like the public will have to make up for the shortfall. Aynsley’s recent interviews with Irish press have illustrated that the bank was in fact solvent at the time of its liquidation, a fact that could lead to some very upset creditors dismissed in the act.

The potentially millions it might cost for the government to pay off the litigation from the creditors will have to come out of the public’s money, something that will almost certainly contribute to the introduction of a harsher budget.

The bank’s former Chief Financial Officer, Maarten Van Eden, has confirmed that this may be the case. “The liquidators may decide not to pay the creditors of Anglo [Irish Bank], but then they will be taken to court and the government will lose, because you cannot walk away from the liabilities of a solvent bank. Insolvency is the only reason for not paying your bills – even if you expropriate by law you will have to pay compensation,” he stated.

This is in direct contrast to the words of the man in charge of the liquidation, KPMG’s Kieran Wallace: “The bank was only solvent at the grace of the Central Bank of Ireland. It was not a solvent bank.”

However, the Department of Finance has seemingly countered this by saying that any difference found in the evaluation of the bank’s assets will have to be paid by the taxpaying public. A source stated the following: “The money will have to be found, yes.”

Creditors liable to bring suits against the government are firms such as Xaia Investments. The German-based company’s representative, Dr. Wolfgang Klopfer, responded to the situation by stating: “I expect a European government to act within the laws and once they act within the laws, there is no need to sue. I’m very confident that they will do it – and if they don’t do it, yes.”

The whole saga seems mired in confusion and the outlook for the public quite bleak, despite Aynsley’s efforts to save the bank from the very situation it finds itself in. To read more on the situation, please take a look at my Slide Share.

The Anglo Irish Bank tapes are fairly shocking. Leading executives at the bank were caught on taped conversations discussing their rather underhand tactics for disguising their actions, leading to a public outcry.

Mike Aynsley, the expert financier brought in to help put the bank back on its feet, has said that he had no idea of the extent of the tapes.

“I was shocked by them frankly. We hadn’t heard all the tapes,” he said, speaking on a talk show on Ireland’s TV3 channel. “We hadn’t heard these particular tapes. It was a bit of a surprise.”

A bit of a surprise is somewhat of an understatement for the public. The tapes reveal the general undercurrent in the bank’s culture, demonstrating the issues that Aynsley has pointed out in his recent interview.

There was a “continuing flow of difficult internal problems,” Aynsley stated. His input into the beleaguered company was to change “the vast majority” of the executives in a bid to streamline the bank and to resolve these very issues.

How did this environment even come to fruition? Aynsley says that the bank was a problem, but that the political situation was also a major contributor. There is a “weak regulatory environment,” according to Aynsley, which was akin to “hosting a 21-year-old’s birthday party… Nobody wants to come and say, ‘Go home.”

The cost of the bank’s folding will still cost the nation a fair amount. Aynsley, being the cautiously realistic type, still expects the bank to cost somewhere between €25 billion and €28 billion to resolve. A hefty number, but one that he has mitigated through his smart thinking during his time as Chief Executive Officer. He managed to significantly reduce the bank’s American deficits, helping to put the balance a little bit back into the region of manageable.

He also spoke about the relationship between the bank and the Department of Finance, which has been subjected to a lot of scrutiny in the past months. It was “testy” at times, Aynsley conceded, and it sometimes made the enforcement of borrowing agreements difficult at times.

Despite this, Aynsley had hopes for the bank just before its liquidation by the government.

For Mike Aynsley’s full comments on the tapes, please visit

On 7 February 2013, Anglo Irish Bank went into liquidation. The move shocked the financial industry, not least Mike Aynsley, the now former Chief Executive Officer for the stricken bank.

The so-called “Project Dawn” took place overnight, seemingly erasing all the work Aynsley and his newly-appointed board had managed to do. The financial data was being collated for presentation, and the rebranded bank – called IBRC – had been on the brink of reform.

Then the project hit, and liquidation ensued. Aynsley and his team were suddenly out of a job, and the Australian returned home after three and a half years spent away from his family saving the troubled bank.

The economic situation in Ireland has been laid at the feet of the beleaguered firm, but Aynsley made an interesting revelation in a recent interview with the Sunday Independent: the bank had been solvent before the dawn rose on Anglo Irish.

The financial expert corresponded via email with the newspaper, resulting in a lengthy interview that illustrated the real situation at Anglo Irish bank, despite his adherence to banking confidentiality rules.

The bank, Aynsley said, was “solvent, and in full compliance with its capital requirements” up until the very engagement of the Joint Special Liquidators on that fateful day. It would seem that the government, rather than taking the solvent bank and trusting in its ability to turn the situation around, went ahead with the move that would make it most certainly insolvent.

Aynsley was incredibly diplomatic on the subject, not confirming any of the tricky statements put to him by the interviewer. The subject of the promissory note – worth €25 billion, rather than the €28 billion that Aynsley estimated would be needed – is one that has puzzled sceptic industry commentators.

When it was put to him that the promissory note was merely a tactic to work the situation to the government’s favour, the former CEO explained the real process. “The result [of that] would erode the capital of the bank and put it into an insolvent position. Again, you would need to have all this confirmed by the SL or the Department of Finance or Central Bank as to what they did. From the State’s perspective though, this wouldn’t make any difference to the PN restructuring as all the entities involved are related parties so it’s a matter of ‘left pocket, right pocket’.”

It’s clear the situation is going to need further scrutiny to find out exactly what happened, but the movement towards clarity and transparency shown by executives such as Aynsley will bring the truth to light.

To read Aynsley’s full comments on the situation, please click this link