THE FORMER head of the National Treasury Management Agency (NTMA) has said he “would have been blown out of the water” had he expressed doubts in official circles about Anglo Irish Bank before the financial crisis of autumn 2008.
Dr Michael Somers told the MacGill Summer School that the agency limited its deposit with the bank to €40 million because “it was just an institution we were unsure of”.
When asked yesterday why he was doubtful about Anglo he said: “You just get a gut feeling.” He continued: “Did I share this information with anybody else? I certainly did not.” Mr Somers said if he had expressed doubts he “would have been blown out of the water” because Anglo was held in such high esteem.
The former agency chief executive, who is now a public interest director of AIB, said it was his belief that the Central Bank “made noises” at official level about the pending financial crisis.
“I believe they may have said something else behind the scenes which hasn’t come out,” he said. however he said it was unclear what action the Department of Finance took to avert the crisis.
When asked to elaborate, he said there, “may have been letters sent from the Central Bank which would have highlighted the difficulties coming down the track”.
Questioning whether the Civil Service was “fit for purpose”, Dr Somers added: “We set up the NTMA in 1990 in the face of ferocious opposition from the Department of Finance.”
On the bank guarantee of September 2008, Dr Somers said that by that stage “there was probably no [other] option”.
Former attorney general and European commissioner Peter Sutherland said on the guarantee scheme that, although he did not have a detailed knowledge of the facts, “everybody should recognise that the decisions taken were necessarily taken on the hoof in very difficult circumstances.”
“It was a very serious question that the Government had to face that weekend,” he said. “I do recognise the difficulties of the decision-making process.”
In a lecture on “The State of Irish Universities”, Dr Sutherland said the question of free third-level fees was regarded as “untouchable” politically in some quarters.
“It can’t be, it shouldn’t be,” he said, pointing out the British system was based on loans.
“They are only repaid by the student when they have an income of £15,000 or more,” he said. “You never pay more than 9per cent of your income.”
He is against reducing the number of Irish universities but felt there should be more specialisation: “We don’t need seven full-service universities.
“At the moment, it’s effectively bums on seats that determines the amount that universities get,” he said in his lecture. “A national higher education system needs different types of colleges.”
