Former Irish Nationwide chairman Michael Fingleton refused to accept the building society was in deep trouble a week before the €440 billion bank guarantee was introduced by the Government in September 2008.
According to Department of Finance documents, published by the Dáil’s Public Accounts Committee this evening, Mr Fingleton followed up a meeting with David Doyle, secretary general of the department, with a letter trying to ease fears about the future of the finance house.
On September 19th, 2008, he wrote: “The society’s immediate problem is a liquidity issue and not a seriously impaired mortgage book problem.”
“In conclusion, it is clear that if the society could resolve the liquidity problems which have been brought about by the destruction of confidence in the last 10 days then we clearly can continue to operate as a very profitable and viable financial institution,” he added.
Irish Nationwide went on to need €5.4 billion of taxpayers’ money to survive.
The Department of Finance documents more than €35 million in special consultancy fees to solicitors, accountants and bankers during the banking crisis.
The most up-to-date report from the Department of Finance revealed law firm Arthur Cox charged €12.7 million for legal advice.
The receipts were handed to the State’s public spending watchdog which last month was told consultants were not asked to vouch for their costs because of the urgency of the crisis.
Expert lawyers were called in to advise on the bank guarantee, the distressed assets management agency Nama, nationalisation of Anglo-Irish Bank, recapitalisations and due diligence on EBS and Irish Nationwide.
Other major bills included €4.5 million paid out this year to Rothschilds and €7.3 million in 2008 and 2009 for Merrill Lynch for advice on banking.
The documents showed:
- The Financial Regulator paid out €7.6 million or banking advice including almost €5 million to PricewaterhouseCoopers; €2 million to KPMG; and smaller amounts to Deloitte, Jones Long LaSalle and Ernst and Young.
- The National Pensions Reserve Fund paid €3.8 million for legal and banking advice to Arthur Cox, PwC and former deputy governor of the Bank of England Sir Andrew Large.
- The National Treasury Management Agency (NTMA) paid €11.8 million to Rothschild and Merrill Lynch.
- Other smaller fees were charged by banking investigators Klaus Regling and Max Watson, €76,160 and also John Purcell, €15,000 and Vivienne Jupp, €17,000.
The Department of Finance refused to disclose legal advice it received in the run-up to the bank guarantee scheme.
Additional reporting by PA