At 9.30 p.m. Irish time on Monday, AIB group chief executive Mr Michael Buckley received a telephone call from Allfirst president and chief executive officer Ms Susan Keating, according to the sequence of events outlined by AIB yesterday. She had devasting news.

A massive fraud had been discovered at the treasury division. The extent of the bank's loss was not yet fully clear but it would be significant.

Shocked and enraged, Mr Buckley immediately dispatched two of his top treasury officials from group headquarters to the US bank's headquarters in Baltimore, Maryland.

The officials spent most of Tuesday trying to establish the full extent of the loss at the US operation.

By close of business on Tuesday they had decided the small Baltimore treasury operation had generated a staggering $750 million (€864 million) in losses.

In Dublin, Mr Buckley and head of group finance Mr Gary Kennedy spent the day closeted with advisers, preparing to disclose the shocking news to the markets and the media.

Ms Keating's phone call, made at 4.30 p.m. Baltimore time on Monday, followed a very difficult few weeks at Allfirst.

In early January, treasury division management said they were concerned at the growing amounts of cash required by one foreign exchange trader to meet closing contracts.

They started to examine his contracts and became increasingly concerned when they found bogus options contracts.

They delved deeper and tried to assess what they were dealing with.

The trader, Mr John Rusnak, was co-operative. As the investigation proceeded over the weekend, he told his superiors he would make some calls from home to traders on the Asian markets as they opened on Sunday evening, Irish time.

He would get some contract valuations and confirmations from them, he said.

Those calls were never made and Mr Rusnak failed to turn up for work on Monday morning. It was then that Allfirst appeared to realise it was in very serious trouble.