By Carmel Crimmins and Jonathan Saul
DUBLIN, Dec 20 (Reuters) - Ireland's financial regulator will review the treatment of directors' loans at major lenders amid mounting anger on Saturday that shareholders were kept in the dark about director borrowings at Anglo Irish Bank.
Anglo's chairman Sean FitzPatrick and chief executive David Drumm resigned within hours of each other this week after FitzPatrick said he had transferred loans of around 87 million euros ($121.4 million) that he had received from the bank to another bank before each year-end over a period of eight years.
Due to this transfer, the loans, which FitzPatrick said he received on commercial terms, did not appear in annual accounts available to shareholders.
Anglo also said total director loans amounted to 150 million euros at the end of September.
Ireland's financial regulator, whose chief executive Patrick Neary has faced calls to resign following the revelations, said on Saturday it would probe directors' loans at all banks and building societies covered by a 400-billion-euro government guarantee programme.
The Irish Financial Services Regulatory Authority became aware of the loans at Anglo Irish in January but its board said on Saturday it was only notified about them on Wednesday.
The regulator said it would be reviewing its own response to the directors' loans at Anglo Irish.
Staff from the regulator have been placed full-time in all of the covered banks and building societies -- Allied Irish Banks, Bank of Ireland, Anglo Irish Bank, Irish Life and Permanent, Irish Nationwide Building Society and the Educational Building Society.
'There is a degree of anger out there among ordinary people at what has occurred at Anglo and that is why we do need real accountability,' John Gormley, a government minister and head of the Green Party, told national broadcaster RTE.
'There would appear to have been a certain amount of complacency in relation to this matter.'
The government has vowed to support Anglo Irish, whose market value has plummeted to just 266 million euros from a height of around 13 billion euros in 2007, but investors and senior politicians have questioned whether taxpayers should bail out the niche commercial lender.
'The reason that we are putting in state capital is to get confidence and lending going again. If Anglo is not going to be a lender for the foreseeable future that's not a great place to put our capital,' said Richard Bruton, finance spokesman for the main opposition party, Fine Gael.
'We need to put our scarce cash into banks that have a long-term future.'
A spokeswoman for Anglo Irish Bank declined to respond to Bruton's comments.
'SHAMEFUL EPISODE'
The Irish Times newspaper said the government was set to inject 3 billion euros into Anglo Irish and become a majority shareholder. The finance ministry and Anglo Irish declined to comment on the report, which did not cite any sources.
In an editorial, the newspaper also questioned the merit of bailing out Anglo following what it described as a 'shameful episode'.
The government has promised to invest 10 billion euros to recapitalise the Irish banking sector, which has seen billions wiped off its market value amid a global credit crunch and a rapidly deteroriating local economy.
Anglo Irish, which is heavily exposed to a struggling commercial property sector, has been the worst affected stock.
Ireland was among the first countries to respond to the financial crisis with a two-year guarantee of bank liabilities worth 440 billion euros but it has not nationalised or bailed out any banks and they have not raised equity themselves.
The government has said it expects to deliver definite proposals by early January on a recapitalisation plan that will be made in tandem with private investment.
The regulator has said it would undertake an urgent review of events surrounding directors' loans in Anglo Irish Bank and will report its findings in three weeks.
FitzPatrick said while the transfer of the loans did not breach banking or legal regulations, it was 'inappropriate'.
(Writing by Carmel Crimmins, editing by Michael Roddy) ($1=.7164 Euro) ($1=.7164 Euro) Keywords: ANGLOIRISH/ (jonathan.saul@reuters.com; +353 1 500 1504; Reuters Mesaging: jonathan.saul.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2008. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
DUBLIN, Dec 20 (Reuters) - Ireland's financial regulator will review the treatment of directors' loans at major lenders amid mounting anger on Saturday that shareholders were kept in the dark about director borrowings at Anglo Irish Bank.
Anglo's chairman Sean FitzPatrick and chief executive David Drumm resigned within hours of each other this week after FitzPatrick said he had transferred loans of around 87 million euros ($121.4 million) that he had received from the bank to another bank before each year-end over a period of eight years.
Due to this transfer, the loans, which FitzPatrick said he received on commercial terms, did not appear in annual accounts available to shareholders.
Anglo also said total director loans amounted to 150 million euros at the end of September.
Ireland's financial regulator, whose chief executive Patrick Neary has faced calls to resign following the revelations, said on Saturday it would probe directors' loans at all banks and building societies covered by a 400-billion-euro government guarantee programme.
The Irish Financial Services Regulatory Authority became aware of the loans at Anglo Irish in January but its board said on Saturday it was only notified about them on Wednesday.
The regulator said it would be reviewing its own response to the directors' loans at Anglo Irish.
Staff from the regulator have been placed full-time in all of the covered banks and building societies -- Allied Irish Banks, Bank of Ireland, Anglo Irish Bank, Irish Life and Permanent, Irish Nationwide Building Society and the Educational Building Society.
'There is a degree of anger out there among ordinary people at what has occurred at Anglo and that is why we do need real accountability,' John Gormley, a government minister and head of the Green Party, told national broadcaster RTE.
'There would appear to have been a certain amount of complacency in relation to this matter.'
The government has vowed to support Anglo Irish, whose market value has plummeted to just 266 million euros from a height of around 13 billion euros in 2007, but investors and senior politicians have questioned whether taxpayers should bail out the niche commercial lender.
'The reason that we are putting in state capital is to get confidence and lending going again. If Anglo is not going to be a lender for the foreseeable future that's not a great place to put our capital,' said Richard Bruton, finance spokesman for the main opposition party, Fine Gael.
'We need to put our scarce cash into banks that have a long-term future.'
A spokeswoman for Anglo Irish Bank declined to respond to Bruton's comments.
'SHAMEFUL EPISODE'
The Irish Times newspaper said the government was set to inject 3 billion euros into Anglo Irish and become a majority shareholder. The finance ministry and Anglo Irish declined to comment on the report, which did not cite any sources.
In an editorial, the newspaper also questioned the merit of bailing out Anglo following what it described as a 'shameful episode'.
The government has promised to invest 10 billion euros to recapitalise the Irish banking sector, which has seen billions wiped off its market value amid a global credit crunch and a rapidly deteroriating local economy.
Anglo Irish, which is heavily exposed to a struggling commercial property sector, has been the worst affected stock.
Ireland was among the first countries to respond to the financial crisis with a two-year guarantee of bank liabilities worth 440 billion euros but it has not nationalised or bailed out any banks and they have not raised equity themselves.
The government has said it expects to deliver definite proposals by early January on a recapitalisation plan that will be made in tandem with private investment.
The regulator has said it would undertake an urgent review of events surrounding directors' loans in Anglo Irish Bank and will report its findings in three weeks.
FitzPatrick said while the transfer of the loans did not breach banking or legal regulations, it was 'inappropriate'.
(Writing by Carmel Crimmins, editing by Michael Roddy) ($1=.7164 Euro) ($1=.7164 Euro) Keywords: ANGLOIRISH/ (jonathan.saul@reuters.com; +353 1 500 1504; Reuters Mesaging: jonathan.saul.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2008. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.