Central Bank governor Patrick Honohan: annoyed at calls for guarantee extension

Central Bank governor Patrick Honohan has suggested that the clean-up of senior management at Ireland's two biggest banks, AIB and Bank of Ireland, is not yet finished and executive departures could still be on the cards.


Speaking at a press conference in Tokyo on Friday, Honohan declined to defend the existing management at the institutions when asked if housekeeping at the banks was complete.


According to a source present at the meeting, he expressed annoyance at comments made by AIB chief executive Colm Doherty and Anglo Irish Bank chief executive Mike Aynsley calling for an extension of the bank guarantee, which he thought helped push up yields on Irish government debt a fortnight ago. "People were left with the impression that there was further change to come," the source said.


Honohan stirred up controversy early last week when he revealed in his Beijing speech that Irish Nationwide Building Society would ultimately need €3.2bn in capital support – €500m more than the government had previously indicated. This was on top of up to €25bn he said would be going into Anglo, bringing the total bill to date on the bank bailout at about €35bn. He also said he was frustrated at the lack of resolution for the expensive problems at Anglo.


"This is a matter which will need to be finally put to rest very soon," Honohan said. "The uncertainty around it is having a disproportionate impact on international investors." Honohan said he expects the government's preferred option for Anglo Irish to be resolved in weeks.


Honohan was speaking on a tour of Asia organised by the Official Monetary and Financial Institutions Forum (OMFIF), a global body for facilitating high-level confidential dialogue among central banks, sovereign wealth funds and private financial institutions.


It was the second time the governor was speaking at an OMFIF event after he gave an address at the Bundesbank in Frankfurt in March.


The tour included meetings with bankers and regulators in Singapore, Kuala Lumpur, Hong Kong, Beijing and Tokyo. The Department of Foreign Affairs and Enterprise Ireland assisted in the organisation of the tour, as well.