Report alleges Central Bank knew of fraudulent transactions between Anglo and IL&P

It has been alleged the Central Bank may have been aware of fraudulent transactions at Irish Life and Permanent and Anglo Irish Bank.

The Sunday Business Post reports newly uncovered files reveal that a €7bn transaction was based on encouragement from the Central Bank for the institutions to help each other out.

The transaction has since been found to be fraudulent with three bankers convicted.

The paper says the documents reveal how the State had "intimate knowledge that the two banks were helping each other out" during the financial crisis in order to make their balance sheets appear stronger to investors and the stock market.

Business Editor with the newspaper Tom Lyons said: "The Central Bank was aware that Anglo Irish Bank and Irish Life and Permanent were helping each other during the financial crisis.

"It shows that after, or around the time that Anglo Irish Bank had been nationalised, that there was concern at a very high level in the Central Bank that this particular transaction could be potentially based on encouragement from the Central Bank itself."

Most Read in Business

World Markets