Results 18,981-19,000 of 27,945 for speaker:Michael McGrath
- Committee of Inquiry into the Banking Crisis: Nexus Phase (6 May 2015)
Michael McGrath: Okay.
- Committee of Inquiry into the Banking Crisis: Nexus Phase (6 May 2015)
Michael McGrath: Okay.
- Committee of Inquiry into the Banking Crisis: Nexus Phase (6 May 2015)
Michael McGrath: But the big loans-----
- Committee of Inquiry into the Banking Crisis: Nexus Phase (6 May 2015)
Michael McGrath: Sure.
- Committee of Inquiry into the Banking Crisis: Nexus Phase (6 May 2015)
Michael McGrath: They were the direct responsibility of corporate that had been ... that had been moved to the new unit within corporate, in terms of land and property-----
- Committee of Inquiry into the Banking Crisis: Nexus Phase (6 May 2015)
Michael McGrath: Okay. Was it up to a certain value, was there a threshold with which it moved across to corporate?
- Committee of Inquiry into the Banking Crisis: Nexus Phase (6 May 2015)
Michael McGrath: Okay.
- Committee of Inquiry into the Banking Crisis: Nexus Phase (6 May 2015)
Michael McGrath: Okay. Can I ask, Mr. Boucher, how does the bank monitor the performance and increased risk of loans involved by allowing interest roll-up facilities?
- Committee of Inquiry into the Banking Crisis: Nexus Phase (6 May 2015)
Michael McGrath: Okay. Can I take you to the group risk policy committee meeting of 17 April 2008? So it's at BOI - B2, Vol. 1, page 99. So, at this meeting, Mr. Boucher, there was a proposal made that the limit would be increased by €100 million in respect of lending to the landbank book within business banking, ROI, and that was opposed by the head of group credit at the time, who declined to...
- Committee of Inquiry into the Banking Crisis: Nexus Phase (6 May 2015)
Michael McGrath: And can you understand what the rationale was for overruling the head of group credit?
- Committee of Inquiry into the Banking Crisis: Nexus Phase (6 May 2015)
Michael McGrath: Yes. And just to read an extract from that meeting - the business banking ROI, "highlighted that customers are seeing significant opportunities to acquire land at relatively good prices and the Group needs to be positioned to support the better clients". So this was in April 2008, well beyond the peak at this stage, and the bank was, apparently, speculating on the value of land at the time...
- Committee of Inquiry into the Banking Crisis: Nexus Phase (6 May 2015)
Michael McGrath: And was it the correct decision to extend additional lending to land speculation in April 2008?
- Committee of Inquiry into the Banking Crisis: Nexus Phase (6 May 2015)
Michael McGrath: Okay.
- Committee of Inquiry into the Banking Crisis: Nexus Phase (6 May 2015)
Michael McGrath: And would it have been a common occurrence for the head of group credit to be overruled by the risk committee?
- Committee of Inquiry into the Banking Crisis: Nexus Phase (6 May 2015)
Michael McGrath: At that point the lending limit in business banking was €2 billion in respect of landbank, the landbank limit was €2 billion, and at that stage it was at €1.95 billion. And it's noted in the minutes that without any new deals, that book is generating an additional €50 million in exposure every six months as interest roll-up facilities accumulate into principal...
- Committee of Inquiry into the Banking Crisis: Nexus Phase (6 May 2015)
Michael McGrath: Sure.
- Committee of Inquiry into the Banking Crisis: Nexus Phase (6 May 2015)
Michael McGrath: Sure. As you know Mr. Boucher, we have had sight of Project Atlas, or certain extracts from it at least in BOI, Vol. 2, pages 27-31, and we've gone through the figures recently with Mr. Goggin. Do you believe now, in hindsight, that there was an over-dependence on lending on one particular sector? And an over concentration of risk by the bank in land, property development and construction?
- Committee of Inquiry into the Banking Crisis: Nexus Phase (6 May 2015)
Michael McGrath: To what extent?
- Committee of Inquiry into the Banking Crisis: Nexus Phase (6 May 2015)
Michael McGrath: So are you of the view that the issue was the quantum of lending rather than the proportion? It was the actual nominal figures involved.
- Committee of Inquiry into the Banking Crisis: Nexus Phase (6 May 2015)
Michael McGrath: And can you put your finger on the single most important reason why, such a mistake was made in lending too much money to one risky sector?