Freefall – Part One

(If you missed Freefall, you can catch it on RTÉ Player.)

Freefall aired on RTE One at 9.35 this evening and led to the build up of the bank crisis in Ireland. The crisis was an impending and dooming collapse almost as far back as 25 years ago when financial deregulation was introduced. When economic activity is deregulated, greed perpetuated the cycle of lending to an unsustainable level. Unregulated banking methods led to implosion of Lehman Brothers, America’s fourth largest bank. A mere 14 days later the Irish government introduced a bank guarantee for Irish financial institutions.

Anglo Irish Bank is the cheap pin-up girl of the Irish financial industry. According to Freefall, Anglo had to lend 60 million euro a day when it realised sources of finance were quickly drying up. It grew faster than the Irish economy, up to 30% growth year on year in the mid-noughties but 80% of it’s loans was focused on property.

Prior to the bank guarantee, it’s revealed that Anglo Irish Bank was insolvent and Séan Fitzpatrick and his CEO approached Bank of Ireland and Allied Irish Bank pleading them to take Anglo off of his hands. Anglo would have collapsed the following day if the bank guarantee wasn’t promised by the Irish State.

Many commentators from around the world were wondering how the Irish, lucky as they may be, would pull themselves of a crisis. When the bank guarantee was announced, these commentators around the world were concerned as citizens would invest guaranteed Irish banks overseas. Interesting to see the reaction from Alistar Darling, British Fiance Minister, about the guarantee and how it would influence British citizens to invest in Irish banks.

There was a distinct sense of  ‘passing the buck’ mentality. It’s true Lehman Brothers collapsing speeded up Ireland’s impending crisis but of course politicians couldn’t have foresight or at least partly admit responsibility. Former Taoiseach Bertie Ahern popped up like a jack-in-the-box as a teaser for next week’s episode.

The real question is for banks and politicians is were they liars or were they fools?

Memorable moments from Freefall was Brian Lenihane chuckling at reminiscing a phone call from ECB when he was at the races. Also the night before the bank guarantee, Brian Cowen allegedly slammed the table, ‘We’re not fucking nationalising Anglo.’

On the search for #freefall, below is one of the best tweets from @shanehegarty referring to zombie banks.

Can’t wait to see Vincent Browne’s rection to the Freefall documentary!

Posted by Klara on 11:31 pm. Filed under Headliner, Latest Column, TV. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry