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THE FORMER BANK of Ireland (BOI) chief executive Brian Goggins has told the banking inquiry that the 29 September 2008 was the worst day of his life.
Addressing the committee, Goggins said:
The day and night of 29 September was the worst day of my life. The pressures, the stress, it was traumatic.
In his opening statement he explained he had been in banking for 40 years. He said the bank’s strategies on risk did not foresee what was coming for the banking system.
I deeply regret this failure and its consequences.
I am very sorry this ultimately happened on my watch.
Anglo’s situation was “perilous”
Bank of Ireland would not have needed a bank guarantee that night had it not been that Anglo Irish Bank was about to collapse the next day, he said, describing Anglo’s situation as “perilous”.
When he heard the news about the possible default of Anglo, he said it was a “grave piece of news”.
He also told the committee that he has no recollection of the drafting of a guarantee or having a piece of paper with him that night, as was recorded in minutes of the meeting.
He said the minutes were incorrect.
Describing the meeting of bankers on 29 September 2008, he said that AIB and BOI were asked to if they could supply €5 billion each.
He said he left the room to consult with his colleagues and decided they could post collateral and come up with the €5 billion, but they “didn’t have it on the spot”.
BOI and AIB
“It was very clear to us the government was not minded to intervene at all” in the early part of guarantee discussions, he said.
“They expected Bank of Ireland and AIB to provide a solution.”
Returning to the room at 2 am, Goggins said both banks could produce the €10 billion, with AIB stating it could do it in the course of the week too.
“The mood of the room changed… there was a palpable sense of relief… at that juncture we were informed of the government guarantee of all banks.
Goggins said he was under the impression the Taoiseach at the time Brian Cowen and the Minister for Finance Brian Lenihan, were aware of the gravity of the situation.
He said the night was a “fraught occasion”, but that the Taoiseach was “very much in charge”, stating that he was chairing the meeting.
Saving the banks
Goggins said he went in to the meeting stating that the situation with Anglo and Irish Nationwide had be dealt with as it was having a “contagion effect” on the other banks. He also said he believed a guarantee would be needed “for a period of time” to provide stability.
He said they arrived for the meeting at 9.30pm, were called in at 11.30pm and bar one meeting where officials met and when BOI went out to discuss if they could find the €5 billion to keep Anglo afloat, BOI and AIB were in the same room.
He said he left the meeting with the full understanding that the bank guarantee would include all six banks.
“When I left at 3.30am, there was no ambiguity about what was being done on that night. A blanket guarantee.”
Lobbying
He also told the committee about a conversation he had with the former Central Bank Governor in the summer of 2008 – in June or July – when he was told there was “lobbying for a system-wide guarantee for all the banks”.
When asked what he thought of such a suggestion, he said:
“It was mentioned it to me in conversation, he sought my view. My view was quite direct. We didn’t need a guarantee and I did not support the concept.”
Pay
The pay of the chief executive was also up for discussion. Goggins earned up to €4 million and admitted he was paid “exceptionally well” . He said that his remuneration was decided by the board and he had no input.
He declined to tell the committee what his pension was stating that it was a matter of public record.
Speaking about the bank’s lending practices, he said the bank made a judgments that it “generally believed were on solid ground”.
He added that the judgments BOI made were “always done in a considered fashion and in good faith.” State support in Bank of Ireland “profoundly instrumental” in its recovery, Goggins said.
The former chief executive pointed out that in comparison to other banks in the market at the time BOI was “conservative” in its lending strategy.
He outlined to the committee that Bank of Ireland was not disproportionaly exposed to property during the boom. At the time, 44% of loan book was accounted for by residential mortgages.
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One big problem in Ireland (Not entirely related to this article) is women with kids are encouraged to stay at home and have to depend on their husbands as creche fees are absolutely absurd. The price to put 2 children into my local creche is €1800 per month. This means that skilled women (in some cases men) are staying at home!
In Belgium they are subsidized so that they can work. Even a house cleaner is subsidized. This kind of system stops women having to stay at home to look after the kids and carry out house work and most importantly getting bullied by an unfair husband!
I don’t think subsidies are the way to go here. people here have this ‘the state should pay for my lifestyle choices’ mentality. Isn’t ireland broke? Why not pay a nanny to look after the kids when you are at work instead? have you a family support network, whereby your parents could help out?
Why didn’t you think of the costs a child involves before you had 2 children in the first place? people in westernized welfare state countries seem to just have kids and expect everyone else to pay for it. This doesn’t happen in the US, and it sure as heck doesn’t happen in any realistic state that doesn’t want to end up in the hands of the IMF.
No Lizzy.
Subsidies are the way to go if it means skilled women are going to be working and paying taxes, this will help Ireland. There are women with PHD’s that are staying at home to look after the kids as its not viable to put them into a creche. This is an awful waste of good skill.
No I don’t have a family support network, My parents are gone and my siblings have emigrated.
Also I don’t have 2 kids, I’m thinking about having kids so I suppose I did think of the costs a child involves as I went away and investigated it.
I was simply stating that the system that exists in Belgium encourages women to work and put their children into childcare rather than depending on their husband just in case the partnership falls apart.
It’s a bit of a tangent, but outside of medicine, I’ve never met anyone with a PhD who created anything
On the issue itself; Subsidies = cash, right? Why not make childcare tax deductible? “The people” abuse free cash just as surely as “the politicians.”
Wrong Chuck, in this case Subsidies does NOT= cash!
In Belgium is costs around €250 to send your child to a creche for the month, It costs this little as it is subsidised by the government. This is certainly the case in Kortrijk.
People pay a lot more tax over there alright but their system seems to work alot better than ours when you count in all the subsidies.
@ Lizzie
Clueless comments really.
Many countries subsidize child care, Belgium, Finland, Sweden, Germany, France and many others.
@ Chuck
“I’ve never met anyone with a PhD who created anything”
Astonishing. Who do you think develops pharmaceuticals? Medical devices? Computers? etc etc etc
“It’s a bit of a tangent, but outside of medicine, I’ve never met anyone with a PhD who created anything”
Read the 7th, 8th, 9th & 10th words there…….
I cannot believe it was only in 1990 that rape within a marriage was ok, if a guy had of tried it he would had swiftly got to meet my friend the baseball bat, I know some one who was raped within a marriage and it changed the person she was and the relationship she had with her child was destroyed
No offense to the Irish generation above me, but you guys have so much crap that you should be ashamed of. On a regular basis I’m thankful that I didn’t have to live into that kind of Ireland.
And in fairness I’ve little doubt the same applied to alot of other small countries too.
We still have a long way to go but we’re making progress.
don’t be so sure that the current generation is without it’s faults and skeletons in it’s closets.
It’s great for you to look back and say the past generations had so much crap but alot of this continous and people in their 20′s now are just as capable of doing the same stuff that people did 40-50 years ago and they do.
True, but at least now,with Internet, immigration and improves technology answer education we’re more influenced by the outside and don’t hold onto ideas and assumptions about how things should be as much.
But yea I’ve little doubt the next generation will look back at massive aspects of our lives and wonder “what the hell were they thinking “.
Adrian your living in a dream world with that reproachful look you throw at the past Irish, and the self congratulation of the present. It’s only because of outside influences that Ireland has OSTENSIBLY changed… the EU, internet and the piles of money invested here which allowed thousands travel and form their own identities free of toxic influences form the collective here.
Some things have changed, but we haven’t moved on that much as a nation, despite outside and technological advances. Still ruled by the corrupt, still women get less pay, less opportunites, still lots of pressure to conform, still poor people and the vulnerable are raped in many other ways then sexually,
and if you haven’t occassionaly fought to change the system that is here, you are just as guilty as anyone in the past. if you have, good on ya!
Well done to the women who have come forward with this story, hopefully you are healing now after all the abuse and shame on the men of this country who did this damage to there wives and families , thankfully we are a society who now can get help with most things and move forward……..well done to OWN try and keep going even though you have little funding .
Thumbs up if you blame the church!
What a dumb comment! Sigh….
I am ashamed of being a man
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