Trichet objected to burning bondholders, finance official says

Minister for Finance Michael Noonan was forced to delay a Dáil announcement about restructuring the banks because then European Central Bank president Jean Claude Trichet objected to burning bondholders, the banking inquiry has been told.

John Moran, former secretary general of the Department of Finance, said the Minister’s announcement in the Dáil in 2011 was delayed because “three or four” speeches were prepared. Mr Moran said discussions were ongoing up until the minute before Mr Noonan took to his feet.

Not be happy

He told the inquiry Mr Trichet was the only person stopping the Government burning the bondholders in Anglo Irish Bank and Irish Nationwide. Mr Moran said Mr Trichet had made it “very clear” he would not be happy if Ireland attempted to burn bondholders. He outlined how Mr Noonan had discussions with the ECB until the minute he entered the Dáil in March 2011 to announce a restructuring the banks.

He told the committee he was not on the phone call with Mr Trichet but said the former ECB president had made it “very clear” he would not have been happy with burden sharing. “I was not on the phone call. I can certainly tell you we had a Minister and a Government who were very anxious to take the decision to burden share with those bonds and the only person who was stopping them was the person on the other end of the phone call.”

Mr Moran was answering questions from Fianna Fáil TD Michael McGrath.