NTMA:THE FORMER head of the National Treasury Management Agency (NTMA), Dr Michael Somers, has said he did not receive an instruction from the then minister for finance to increase the level of deposits held in Anglo Irish Bank.
His comments followed a report in the Irish Daily Mailyesterday which alleged that Taoiseach Brian Cowen, while serving as minister for finance, had asked the agency to deposit sovereign funds in Anglo in the months before it collapsed.
Former Anglo chief executive David Drumm, now living in the United States, claimed Mr Cowen had told the bank’s executives that the State body had not done what he had asked.
Anglo wanted about €300 million of sovereign funds deposited with it to shore up confidence in the bank as foreign investors withdrew their funds.
Dr Somers told the Today with Pat Kennyradio programme that the National Treasury Management Agency had €40 million on deposit with Anglo in 2008 and said he had not been asked orally or in writing by the minister for finance to increase this.
“We did put a deposit with Anglo of €40 million in August 2007, and that was put on for a period of one year.
“In fact, when we began to look at banks and withdrawing deposits and putting them with the Central Bank, I was somewhat dismayed to discover that we were stuck with Anglo, as it were, for a year because my inclination would have been at that stage possibly to take the money off them,” he said.
Dr Somers said the NTMA had sought to insure the deposit through the credit default swaps market.
However, even in late 2007 the market was taking a “jaundiced” view of Anglo, he said, and the cost of such insurance was increasing.
Dr Somers said there had been some pressure at “official level” to do more with the banking system. He said he sought legal advice and was told he would be stepping outside his statutory responsibilities if he did something for the benefit of the banking system that might be contrary to the benefit of the State.
“I made it very clear that if we were to put any money with banks, I required written direction from the minister for finance. That was my legal advice, and I stuck to it,” he said.
“There was no pressure at any stage, political or otherwise, to go beyond the limits that we would have laid down.”
A spokesman for the Taoiseach also denied the claims and said: “The position is that there is no basis in fact for these claims”.
Tánaiste Mary Coughlan said yesterday: “We just have to reiterate that nothing untoward, inappropriate happened between the Taoiseach on the issues that are in the public domain”.
Ms Coughlan criticised Mr Drumm and Mr FitzPatrick for “running to journalists” and said it was important that matters were dealt with in the proper way.