The House and the people of Ireland owe a "Thank You" to Deputy Catherine Murphy for persistently bringing this matter to the attention of the people of Ireland and the Dáil. We must have openness and light on the biggest banking collapse in the civilised world to date. As an outcome Anglo Irish Bank, now IBRC, and NAMA have a combined written down value of assets in the order of some €60 billion to €65 billion. Around one million people in Ireland today hurt and will continue to hurt for the rest of their lives as a result of the unjustified and incorrect distribution of the losses that occurred from the credit pyramid-Ponzi scheme that was the creation solely of the boards of banks in the period 2001 to 2008. It is provable from the balance sheets but ignored by the current Administration and I am deeply depressed that, having been elected to this honourable House, any contributions I have made on this have been completely ignored and set aside. There is an unwillingness to have clarity, truthfulness and a discussion of the correct analysis.
In February 2013, we came into this House at an ungodly hour for a two-day event to deal with the special liquidation of Anglo Irish Bank, now IBRC. We also cement-set the unjustified loses of investors in the bank onto the Irish people. It has been blurred and wrongly taken on board by the establishment of this country, which is hiding behind a growth rate of 4% for next year and all that nonsense. People have come into my office whose family members have committed suicide, as have widows and sick people who are literally being bullied and beaten up by the so-called pillar banks who are still operationally paralysed because they do not have the capabilities to deal with the loan ledgers which they have remaining.
Anglo Irish Bank suffered admitted losses of €28 billion and Irish Nationwide Building Society losses of €6 billion - a total of €34 billion. A series of promissory notes was created for that, which are now promissory bonds, standing at €26 billion. These should be cancelled unilaterally and Mr. Draghi told about it. I will be travelling to Brussels on 1 July to support the Ballyhea group with that in mind. Yesterday, the Taoiseach said things had improved with so many thousands of jobs being created after the loss of jobs a few years ago but this is just political point-scoring. It is as if the collapse was all down to property, but it was not. The scale of credit that was allowed to flow into this country, across the board, brought the size of domestic banking from three times national income to over five and a half times national income.
I want to talk about how the so-called profits of IBRC were inflated for a period starting in 1993 and travelling forward to the present date. There were two ways this was done. First was the direct manipulation of interest charges and the concealment of loaded interest, which happened in the majority of cases. An extensive exercise carried out by Bank Check revealed this. It was an excellent exercise and gives the key facts as follows: there were 113 variable DIBOR and EURIBOR loans and 17 LIBOR-based transactions. Some 494 separate DIBOR-EURIBOR rates were reconciled and found to be loaded to a degree ranging from 0.5% in the early 1990s to between 0.03% and 0.05% in 2002 and 2003. Some 80% of all the loans examined, relating to many clients, were found to have this loading. The statements which clients received never showed the breakdown of the base rate and the DIBOR 3-month rate plus a margin, which had been agreed by loan agreements, plus the reserve asset cost, RAC, if and when it applied. The quantum of the loaded overcharging was in the order of 0.3%. A margin of 1.5% would comprise two elements, namely, the amount that goes to cover overheads, which is usually about 0.9% of the 1.5%, and the remainder, 0.6%, which is the profit of the bank. A loaded secret dark pool profit of 0.3% would represent one third of the overall profits, including that dark pool profit. That means the market valuation of Anglo Irish Bank in the 14 years up to 2002 when this was going on was overstated by one third. If it had been discovered by proper auditing the market would react with a collapse, like the St. Valentine's Day massacre, of at least one third of the value of the bank and this would affect the shareholders, creditors and depositors. That would happen irrespective of whether there was an international credit bust and a freeze of credit. This has been brought to the attention of the NTMA, NAMA and others but it has been ignored to date. I have the evidence here and it is shocking.
There is a superbly authoritative letter about the second element of the overcharge by Anglo Irish Bank, now IBRC. Interest was charged for 365 days across the board, when it should have been 360 days. In the case of IBRC v. John Morrissey, this was the decision of Ms Justice Mary Finlay Geoghegan. It has been brought to the attention of the bank, which has been asked to explain what has been done about this in relation to other clients, but it has been ignored.
The terms of reference which the Government has outlined for the investigation cover the period from 2009 to 2013, which is absurd. I am ashamed that this is the case as it excludes the professional conduct of the special liquidators. I have other examples of where clients of what was Anglo Irish Bank and is now IBRC are being mauled while special preferential treatment has been given to certain bidders on loans. I cite the Blackrock Clinic in this respect, which is now the subject of open court proceedings. I have the court depositions and it appears from the evidence that the senior accounting advisers of Larry Goodman are former KPMG partners and very close to the special liquidators at KPMG, Mr. Richardson and Mr. Wallace. It appears there was preferential treatment in the bidding for some of the loans of the investors in the Blackrock Clinic. This should also be investigated as there is too much darkness and too much selective, narrow stuff. On the day after the six-month stay on involvement in any property transactions relating to NAMA loan assets, the chief loans manager of NAMA, Mr. John Mulcahy, joined the advisory team of Denis O'Brien.
KPMG were the auditors of Irish Nationwide Building Society, which had a balance sheet of €14 billion. They made losses of €6 billion which were put on the backs of the Irish people. That is wrong.
KPMG was the auditor. It is unbelievable stuff. In May of last year all the Opposition Members put forward a motion in which people with experience and qualifications - in fact, myself - offered to go on the banking inquiry, and the Government, under the Whip, told Deputies to vote it down.
