Former AIB chairman 'regrets' part in bank decisions

Former Allied Irish Bank chairman Dermot Gleeson has apologised again for his role in country's economic collapse.

Before a parliamentary inquiry into the banking crisis, Mr Gleeson said the country’s largest bank had lent too much to developers, put too much faith in their wealth and relied on risk systems which were not up to the job.

While the “great recession” of 2008 did not start in Ireland, there was “no doubt” AIB took decisions that made it a lot worse for Irish citizens, he also admitted.

“I wish to express my sincere regret for my part in those events and renew the apology I made at the AIB annual general meeting in 2009,” he said.

During that meeting, he said he regretted some of the lending decisions made by the bank.

An angry pensioner, who said he had lost €20,000 in AIB shares, threw eggs at him.

Mr Gleeson told the Oireachtas Banking Inquiry that it was perfectly clear in retrospect that AIB’s lending was “expansive” at a time of excessive risk taking on the back of a construction and property-fuelled boom.

But he claimed no lender could have stopped the bubble.

“Only authorities can do that,” he said.

If AIB had stopped lending, their competitors would have happily stepped in to satisfy the demand, he told the hearing.

A former barrister and attorney general to John Bruton’s Fine Gael-led government, Mr Gleeson said there was a national consensus that the country was growing at a sustainable level and the banks were well buffered against big shocks.

The key issue in the spectacular nosedive that followed was widespread predictions by leaders and economists of a “soft landing”, he told TDs and senators.

“I think that is central to the errors,” he said.

The former bank chief also claimed there were “some rational justifications” for the policies at the time, which turned out to catastrophic.

These included demand for housing, international banking standards and lenders’ reliance on risk forecasts.

Mr Gleeson was chairman of AIB between 2003 and 2009.

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