A meeting of the board of Irish Life & Permanent (IL&P) is continuing tonight as pressure mounts on the company’s directors and senior management to resign over the bank’s €7 billion deposit into Anglo Irish Bank last September.
The crisis discussions, which are taking place at the company’s headquarters in the Irish Life building on Abbey Street in Dublin city centre, began at 4pm as political pressure grew on the State’s largest mortgage lender and life assurance company. The boardroom talks are said to be intense.
Earlier this evening, Minister for Finance Brian Lenihan said that he expected the bank’s board to “live up to their face up to its responsibilities”.
In an interview on RTÉ, Mr Lenihan said it would not be appropriate for him to say whether he had confidence in IL&P chairwoman Gillian Bowler or the bank’s chief executive, Denis Casey.
Mr Lenihan had earlier called Ms Bowler and Mr Casey to a lunchtime meeting to discuss the controversy over the temporary deposit, which helped to bolster Anglo Irish’s deposit levels on September 30th, the day its financial year ended.
The Minister signalled in his television interview that Mr Casey should go and that he had raised these issues at the meeting.
"I shared my views with the chair, and I would expect the board to face up to its responsibilities," Mr Lenihan said. “I understand a meeting of the board of the Irish Life & Permanent is now taking place to consider the implications of all of this.”
Green Party leader John Gormley predicted the latest revelations about the movements of deposits between Anglo Irish and IL&P would lead to resignations.
“There will be, and there must be, root-and-branch reform of our banking system. I believe we need a general crackdown on corporate crime in this country,” Mr Gormley told the Dáil.
About the end of last September, Anglo Irish placed deposits of up to €7 billion with IL&P, which in turn placed €7billion through a non-banking subsidiary, Irish Life Investment Managers, back with Anglo Irish.
Some €4 billion of the deposit was placed with Anglo Irish on September 30th, the day the bank guarantee was introduced.
The placing of the deposit by a non-banking IL&P subsidiary enabled Anglo Irish to categorise it as a customer deposit, which are regarded as more secure, rather than a deposit from another bank. The deposit was withdrawn within a week to 10 days.
This categorisation also allowed Anglo to prop up its deposit levels and mask the levels of deposit withdrawals during September.
Mr Lenihan said that the financial regulatory system needed to be reformed if Ireland's international reputation is be restored.
He also said that further information about Anglo Irish will emerge in the coming weeks when a report into its dealings is published.
The Government won the vote on the bank recapitalisation of Allied Irish Banks (AIB) and Bank of Ireland by 74 to 66.
Stock market investors responded negatively to the Government's €7 billion recapitalisation plan for Allied Irish Banks (AIB) and Bank of Ireland as financial stocks fell.
The share prices also declined after Bank of Ireland said that its bad debts could almost double to €6 billion over the next three years if the economic situation continues to deteriorate.