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15/12/2010
Banks Were 'A Bit Optimistic' Says Leak
Ireland's economic outlook from both the banks and Government were under suspicion by the US as early as 2008, as claims emerge that their projections were "a bit optimistic".
Two-year-old cables, released by Wikileaks reveal that the Secretary General at the Department of Finance, Kevin Cardiff, told US embassy officials in Dublin he was confident the Government would not have to bail out the State's banks.
Irish officials told US ambassadors in October 2008 the bank guarantee, entered into by Finance Minister Brian Lenihan, was created because of "classic 'herd mentality'… based mostly on rumour and innuendo about Irish banks rather than any hard facts".
According to the leaked cables, Washington's economic advisor in Dublin Thomas Foley held meetings with the Central Bank of Ireland and the Department of Finance after which he reported: "[Cardiff] pointed out that auditors contracted by his department to look at the books of at least two of the institutions under pressure came away with a 'favourable impression of the loan books'."
The period of investigation into the bank's loan books is around the same time as the hidden loans controversy, during which the Sean Fitz-Patrick led Anglo Irish Bank was loaned over €80 million by a rival bank for short periods to cover holes in its books.
Despite assurances from Kevin Cardiff, Washington's economic adviser in Dublin warned the US that Ireland might be "a bit optimistic" about the financial sector's "prospects” saying they were not convinced that Ireland could suitably manage the growing crisis in its banking system.
(DW/BMcC)
Two-year-old cables, released by Wikileaks reveal that the Secretary General at the Department of Finance, Kevin Cardiff, told US embassy officials in Dublin he was confident the Government would not have to bail out the State's banks.
Irish officials told US ambassadors in October 2008 the bank guarantee, entered into by Finance Minister Brian Lenihan, was created because of "classic 'herd mentality'… based mostly on rumour and innuendo about Irish banks rather than any hard facts".
According to the leaked cables, Washington's economic advisor in Dublin Thomas Foley held meetings with the Central Bank of Ireland and the Department of Finance after which he reported: "[Cardiff] pointed out that auditors contracted by his department to look at the books of at least two of the institutions under pressure came away with a 'favourable impression of the loan books'."
The period of investigation into the bank's loan books is around the same time as the hidden loans controversy, during which the Sean Fitz-Patrick led Anglo Irish Bank was loaned over €80 million by a rival bank for short periods to cover holes in its books.
Despite assurances from Kevin Cardiff, Washington's economic adviser in Dublin warned the US that Ireland might be "a bit optimistic" about the financial sector's "prospects” saying they were not convinced that Ireland could suitably manage the growing crisis in its banking system.
(DW/BMcC)
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