Results 19,801-19,820 of 27,945 for speaker:Michael McGrath

Committee of Inquiry into the Banking Crisis: Context Phase (11 Mar 2015)

Michael McGrath: By describing the delay as unfortunate, Professor Hardiman is speculating that things might have been different if it was done earlier.

Committee of Inquiry into the Banking Crisis: Context Phase (11 Mar 2015)

Michael McGrath: The professor noted in her opening remarks before the committee today that the powers available to the Financial Regulator prior to the crash were "not excessively weak". Will she expand on that and indicate the basis on which she arrived at this conclusion?

Committee of Inquiry into the Banking Crisis: Context Phase (11 Mar 2015)

Michael McGrath: On page 4 of her opening statement, Professor Hardiman makes reference to a dearth of accurate information available to policy makers about the true state of the banks prior to extending the guarantee, which she describes as a clear failure of the regulatory regime. Is she relying on the work of others in making that statement or what is her basis for saying it?

Committee of Inquiry into the Banking Crisis: Context Phase (11 Mar 2015)

Michael McGrath: The professor referred to privileged access to decision making. Is there one clear example of where that type of access was used successfully to influence a decision by policy makers or influence the approach of the Central Bank or regulator to conducting their functions? Is she talking in the round and in generalities or does she have specific instances to back that up?

Committee of Inquiry into the Banking Crisis: Context Phase (11 Mar 2015)

Michael McGrath: I am asking this question in the context of the banking crisis.

Committee of Inquiry into the Banking Crisis: Context Phase (11 Mar 2015)

Michael McGrath: I welcome Governor Honohan back. When he appeared before the joint committee on 15 January, I asked him if Anglo Irish Bank should have been allowed to fail at the end of September 2008. I refer to page 113 of the transcript. This was in a hindsight scenario and the Governor replied, "Yes". I went on to ask, "Is the Governor saying that that decision should have been made even with the...

Committee of Inquiry into the Banking Crisis: Context Phase (11 Mar 2015)

Michael McGrath: Let us deal with the scenario of the information they actually had available. Let us tease out the scenario involving the information available at the time, that is in September 2008, in respect of Anglo Irish Bank.

Committee of Inquiry into the Banking Crisis: Context Phase (11 Mar 2015)

Michael McGrath: I seek clarity, because what the Governor said on the day was quite different. Moreover, it was in the scenario of the information available at the time and certainly, the clear impression was that Anglo should have been allowed to fail.

Committee of Inquiry into the Banking Crisis: Context Phase (11 Mar 2015)

Michael McGrath: The Governor is clarifying today that what he meant by allowing it to fail was to nationalise it.

Committee of Inquiry into the Banking Crisis: Context Phase (11 Mar 2015)

Michael McGrath: Sure. On page 133 of the Governor's 2010 report he states: "Still, given the perceived lack of a solvency problem at Anglo (or the other banks) on balance a guarantee seems to have been the best approach, not least because no other clear and effective medium-term solution appeared available." He went on to refer to ELA and that it also could have allowed the nationalisation of Anglo.

Committee of Inquiry into the Banking Crisis: Context Phase (11 Mar 2015)

Michael McGrath: However, in his report the Governor appears to be favouring a guarantee for Anglo.

Committee of Inquiry into the Banking Crisis: Context Phase (11 Mar 2015)

Michael McGrath: The Governor is holding to the view that Anglo should not have been liquidated on the night, allowed to fail the following day.

Committee of Inquiry into the Banking Crisis: Context Phase (11 Mar 2015)

Michael McGrath: The Government should have stepped in, issued a partial guarantee at least -----

Committee of Inquiry into the Banking Crisis: Context Phase (11 Mar 2015)

Michael McGrath: ----- removed the management, nationalised the bank and then what?

Committee of Inquiry into the Banking Crisis: Context Phase (11 Mar 2015)

Michael McGrath: Much of this comes down to the interpretation of language. When Professor Honohan was asked about whether Anglo should have been allowed to fail even with the information available at the time, and he said "Yes", the vast majority of people would take that to mean it should have been allowed to hit the wall. That is not what he appears to be saying.

Committee of Inquiry into the Banking Crisis: Context Phase (11 Mar 2015)

Michael McGrath: He also made reference to the investment banks in his previous evidence, when he suggested that in hindsight Anglo should have been allowed to fail. He stated: "all the investment banks that looked at it saw that Anglo’s business model was not credible in the market." What investment banks were they and what did they say? What was Professor Honohan referring to?

Committee of Inquiry into the Banking Crisis: Context Phase (11 Mar 2015)

Michael McGrath: Professor Honohan will be familiar with the memorandum e-mailed from Merrill Lynch to Kevin Cardiff at 6.43 p.m. on 29 September 2008, which enclosed a memo dated 28 September. The member states: "it is important to stress that at present, liquidity concerns aside, all of the Irish banks are profitable and well capitalised." There was no warning about Anglo.

Committee of Inquiry into the Banking Crisis: Context Phase (11 Mar 2015)

Michael McGrath: Is it Professor Honohan's view that there were warnings, whether implicit or explicit, from the investment banks about solvency issues in Anglo?

Committee of Inquiry into the Banking Crisis: Context Phase (11 Mar 2015)

Michael McGrath: To clarify Professor Honohan's view on Anglo Irish Bank at the end of September 2008 and the options available to it in a hindsight scenario, he is saying that if there was knowledge about the scale of the black hole in the bank and the potential cost of €35 billion, it should have been let go and liquidated.

Committee of Inquiry into the Banking Crisis: Context Phase (11 Mar 2015)

Michael McGrath: Within days they would have been liquidating it if they had known the extent of the problem but Professor Honohan accepts that the extent was not known.