The Bankers: How the Banks Brought Ireland to Its Knees
Board-level reporting on the Irish banks and their regulators.
Summary
Shane Ross was a financial journalist and an Irish senator, and he wrote this immediately after the Irish banking collapse. It is an attack on the individuals and institutions he holds responsible.
The substance concerns the banks and their boards. Ross covers Anglo Irish Bank and its concentration in property development lending, its funding through interbank markets rather than deposits, the loans to its own directors that were concealed by moving them between institutions at reporting dates, and the transactions with a group of investors to unwind Sean Quinn's contract for difference position in the bank's own shares. He covers Allied Irish Banks and Bank of Ireland, their competitive response to Anglo's growth, and the board memberships that connected bankers, developers, regulators and politicians.
His argument is that the Irish financial establishment was a closed group whose members sat on each other's boards and on state bodies, and that regulation failed because the regulator was part of the same group. He also attacks the September 2008 blanket guarantee of bank liabilities, which he treats as a decision made on the banks' own information. Ross is a polemicist and a participant in Irish politics, and the book was written before the criminal investigations concluded. Its account of Anglo's practices has been substantially confirmed by the subsequent legal record.
Key takeaways 7
- Anglo Irish Bank concentrated its lending in property development and funded itself through interbank markets rather than deposits.
- Loans to Anglo directors were concealed by temporarily moving them to another institution at reporting dates.
- Anglo arranged for a group of investors to buy shares to unwind a large contract for difference position in its own stock.
- Competitive pressure from Anglo's growth drove the larger Irish banks into the same property lending.
- Irish bank boards, state bodies and the regulator were populated by a closed group with overlapping memberships.
- The September 2008 blanket guarantee committed the state to liabilities whose size nobody had established.
- Ross writes as a political participant and polemicist, though the Anglo allegations were substantially confirmed later.
Who should read it
Readers wanting a contemporaneous account of the Irish banking collapse and of the institutional relationships behind it.
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