DISCUSSIONS BETWEEN Anglo Irish Bank and the Quinn Group over the group’s €2.8 billion debt have not yet reached a stage where the question of Government intervention might arise, according to several informed sources in the Government.
Minister for Finance Brian Lenihan confirmed last night, following his meeting with a political delegation from the Border counties, that Anglo Irish Bank is in discussions with the Quinn Group to develop a solution to the crisis.
The talks have been seeking to find an alternative plan that would avoid the confirmation of joint administrators to Quinn Insurance in the High Court on Monday.
One scenario that has been explored might see Anglo Irish Bank take over the running of the Quinn Group, or a portion of it. As the bank is now nationalised, such a development could necessitate the approval of the Department of Finance or a possible injection of funds from the taxpayer. It might also have implications for the decision by the regulator to intervene in Quinn Insurance and place administrators in the business.
Well-placed Government sources said that such questions did not arise at this stage. They also added that they may well not become an eventuality after the High Court hearing on Monday where the regulator will seek to have the appointment of the administrators confirmed.
Similarly, another Government source said that if the bank “conducted its business at arm’s length” with the Quinn Group, then the question of Government intervention may not arise.
“Even if an injection is required, it could be done under normal commercial lending practices that would not involve the Government becoming involved,” said the source.
The Government spokesman, when asked about the possibility of Anglo Irish Bank becoming involved in the running of the Quinn Group, said that as of now there have been no discussions at Government level about any such possibility.
In their public comments Taoiseach Brian Cowen and Minister for Finance Brian Lenihan have emphasised the independence of the office of the Financial Regulator, Matthew Elderfield.
In a statement last night, Mr Lenihan reiterated that the regulator “has an independent role to play in protecting policy-holders and the wider economy”.
The Taoiseach’s spokesman has also said that the independence of the regulator’s role was not compromised by the Taoiseach’s decision to ask Enterprise Ireland to become involved in protecting employment in the wider Quinn Group.
“One issue was about Quinn Insurance and the High Court proceedings. Another separate matter was about employment in the other companies in the wider Quinn Group. The Taoiseach was directing his attention at those and he said that directly on Sunday,” he said.
Fine Gael and Labour said that an intervention of that kind to protect jobs in the wider Quinn Group was appropriate as long as it did not conflict with the role of the regulator.