THE CHIEF executive of the National Asset Management Agency said he did not know if the National Treasury Management Agency communicated its concerns about Anglo Irish Bank to the wider Government in 2007.

Brendan McDonagh was head of treasury at the NTMA then and was involved in the decision to restrict the amount of money that the NTMA put on deposit with Anglo Irish Bank because of concerns about its stability.

It was the responsibility of the agency’s then chief executive, Michael Somers, to report to the Minister for Finance, he said.

“I was responsible for setting [deposit] limits. We had a look at the growth of the [Anglo Irish] balance sheet,” he said.

“The view was that he [Mr Somers] did not understand the business model. He took the view that if he did not understand it he was not going to put money into it.”

When asked by broadcaster Vincent Browne – who was moderating a discussion on bank rescues – if the concerns were communicated up the line Mr McDonagh replied: “I can’t answer that. Michael had the reporting relationship with the minister. We were not the regulator.”

He added that he was not aware of any pressure being brought to bear on the NTMA to resume placing money on deposit with Anglo, which collapsed into insolvency and state ownership in early 2009. The cost to the taxpayer of meeting the bank’s obligations is expected to exceed €25 billion.

Prof Antoin E Murphy of Trinity College Dublin said that if Mr Somers had formed the view it should have gone through to the Central Bank and the regulator then it should have been debated. “Did that happen and if so why were his views disregarded,” he asked.

Prof Brian Lucey said that it was a matter of concern if Mr Somers’s views had been disregarded.