Anglo Irish Bank Hidden Loans Controversy - Outcome and Nationalisation

Outcome and Nationalisation

Anglo Irish Bank has said it would review its policy on directors' loans following FitzPatrick's resignation. The Financial Regulator announced he would be examining the loans issued by Anglo Irish Bank to all its directors, claiming he became aware of the existence of the loans "following an inspection earlier this year". Ultimately he became a victim of the controversy and subsequently announced his retirement.

The Chartered Accountants Regulatory Board (CARB) has initiated an investigation into the "circumstances around the issue of inappropriate directors' loans at Anglo Irish"and into the performance of Ernst and Young. The Irish Association of Investment Managers expressed how it was "surprised and disappointed" at the controversy and announced it would be writing to Anglo's new chairman to describe its worries.

The Irish State subsequently announced it was to become the majority shareholder in Anglo Irish Bank by injecting €3 billion into the bank. Opposition party Fine Gael opposed this move and stated on 14 January 2009 that the bank should be shut down but the following evening the Irish government announced that recapitalisation was no longer a serious option and nationalised the bank instead. Lenihan stated that "clear blue water" had been inserted between the old and new versions of Anglo and defended the nationalisation by saying that if the government were to let the bank fail it would be saying to Ireland and other economies that the country was "closed for business". At an Emergency General Meeting held at the Mansion House, Dublin on 16 January 2009, the bank's shareholders angrily voiced their opinions on FitzPatrick's involvement in the bank's downfall and their lack of confidence in the banking sector. The auditors, Ernst & Young were also criticised for failing to detect the loans during their audits. At the EGM the total level of loans to directors was announced as €179 million.