There’s an old saying “to be sure to be sure” and it’s obviously something that Permanent TSB take seriously. I say this because the bank is now under investigation by the regulator as it has emerged that the Permanent TSB lodged €4B to the Anglo Irish Bank within hours of the government guarantee scheme becoming law. The Government-appointed directors at Anglo Irish are also investigating the deposit, which was lodged prior to the bank's reporting year-end on September 30th. It's understood that the deposits were withdrawn by ILP a week to 10 days later.
The regulator is examining the movement of deposits into the bank around its year-end and whether Anglo Irish Bank artificially propped up deposit around the end of its accounting year in a bid to bolster its financial strength. The news peels back another layer on the charade that Ireland’s financial service sector ahs become. The obvious question is why would Permanent TSB take such a step? Is it further evidence of an old pals act at the top in Irish business? Given that Permanaent TSB is covered by the same government guarantee scheme there was no chance of a run on the bank at the time of the move so why lodge money outside the bank at this stage? Very intersting, I’d love to know why.
What’s certain is that shareholders were not told and it effectively inflated the books and fooled those investors as to the extent of its liquidity. this was a deliberate deception of shareholders as tot he true extent of the banks books, I note that the bank is not advancing the jesuitical defence of the former chairman agaisnt accusations of illegality when he was moving cash in and out in a similar way.
These figures were moving in the front door at years end just as Sean Fitzpatrick was wheeling his traunch in from his warehouse. The reception at the bank must have been a very busy place with the comngs and goings of cash. which begs the same question as with Fitzpatrick's loans which subsequently turned out to be the tip of the iceberg and its this, if this is what we know about Permanent TSB, what else is there to e revealed? Permanent TSB which is broadly a domestic mortgage lender has escaped attention so far but now seems to be firmly in the sights of the regulator.
To make matters more intersting Brian Lenihan has now decided that he’s oing for the bad bank scenario where all toxic debt from across the system will be cleared through one institution. This has come at the end of a week when Bankers saw off the government’s demand for cuts in bonuses and a 2 year moratorium on re-possesions for defaulting mortgage holders due to job losses. At market’s close tomorrow Minister Lenihan is set to announce how he will proceed on market re-capitalisation. As of yet there’s no guarantee that the re-captitalised banks cannot go back to the speculators who lost the money in the first palce rather than provide liquidity to maintain employment. The more the controversy staggers on, the more there is a sense of a minister unable to cope. Is it any wonder small business are closing? There's only one sure thing, send in an inspector or the fraud squad.