Mr. Simon Carswell:

I believe Anglo had two fatal flaws regarding its concentration in the property market. It had convinced itself it was not a property lender. It also got too close to its borrowers. Simply put, it had too many eggs in one basket. The bank had four main areas of cover in how risk was approached and how it protected its loans. The first was cash flow and rental income from buildings and properties. The second was the value of the property itself. The third was cross-collateralisation where Anglo had borrowers' other assets in its portfolio. If the first three areas did not work out then the fourth area of cover was the personal guarantee where Anglo itself could go after the developer or builders.

Stripped away, all those securities it believed it had all centred around property. I believe the bank recognised this and that it was getting too heavily into the property market. An internal instruction was issued that Anglo would try to bring property development on the loan book down to 20% and reduce this over time to 15%. That it was unable to stick to those limits shows how close the bank was to its borrowers. It was unable to pull back from that sector. Later credit reports in 2005, 2006 and 2007 show the bank could not meet the restraint it wanted. At that stage, the risk was its closeness to borrowers. In the book I quote a former senior Anglo executive where he felt that customers were running the bank. I would tend to agree with that.