The Anglo cross-currents
It’s going to be a long weekend for Brian Cowen so this will have to be a frequently updated post. Let’s start with the seemingly damaging Irish Times story that Anglo lobbied Central Bank director and Druid’s Glen diner Alan Gray the day before the guarantee –
Anglo had sought a €1.5 billion short-term loan from the Central Bank, which had not yet made a decision on the request. It is understood that the bank approached Mr Gray in the belief that he would make representations to the Government to intervene to prevent the bank running out of cash.
Something important to note: the option of a Central Bank loan to Anglo — Emergency Lending Assistance — was a better option that the guarantee. It would have kept Anglo in business long enough to get a better look at its books before the government tied itself irrevocably to it. The fact is, even now, we still don’t know where the final push for the guarantee over more moderate options came from.
There will be a lot to disentangle over the coming days.