Banks lavishly wined and dined property developers days before bank guarantee, Inquiry hears
Property developers were being wined and dined by banks just days before the bank guarantee, according to new documents published by the Banking Inquiry.
Bank officials' statements to the Inquiry said that the hospitality was appropriate.
Property developers Gerry Gannon and Peter Cosgrave have issued details of their relationships with Irish banks for the Banking Inquiry, but they will not be appearing at any hearings.
In their statements the developers detail some of the trips they went on, paid for by their lenders.
Ciaran Hancock is Business Correspondent with the Irish Times.
"Both of them were on a trip courtesy of AIB to the Ryder Cup golf match in Kentucky, in the United States in 2008, and this was a couple of weeks before the bank guarantee," said Mr Hancock.
"A number of other developers were on that trip as well, and they were also treated to lavish corporate hospitality from a range of banks."
He said that the timing of the later trips are surprising, considering the state the economy was in.
"We were not fully in crisis mode, but certainly the seeds were sown, the regulator, the Government and the banks were there and they were talking to each other at that stage, and it just seems incredible that type of corporate hospitality would have taken place," said Mr Hancock.
Independent TD for South Dublin Shane Ross agrees.
"There was an epidemic of corporate hospitality at a time that the banks were going under, it's a bit like the fall of the Roman Empire and Nero fiddling while Rome burnt," said Deputy Ross.
Statements from Tom Hayes from Bank of Ireland and Colm O'Doherty from AIB say the spending on entertainment was appropriate and on a par with common practice in the industry.
Shane Ross has said that little has changed in banks' attitudes.
"To hear that this was common in the industry does not excuse this for one moment," said Deputy Ross.
"They were spending shareholders money - small shareholders money, and other people's money - and there are very few signs that the banks have reformed in any way," he said.
" We see the same sort of coterie of directors, and I suspect that they are going to re-embrace the old culture, including bonuses. I see very little evidence of change in the banks at all."
