on 12 September 2011
Anglo Republic: Inside the Bank that Broke Ireland by Simon Carswell is a thoroughly satisfying and compelling read. Carswell documents the rise and fall of the bank demonised by the Irish media in a superbly thorough and measured fashion. Eagerly anticipated, the volume brings together many of the tantalisingly shocking stories surrounding the high-flying executives of Anglo Irish and weaves them together with technical explanations and thorough research into an eminently readable and ultimately fulfilling expose of the big decisions and the the mindsets that led to the downfall of the institution.
I was eager to read the book to understand the fuller story behind the headlines and I was not disappointed. Like most Irish these days I would love to see the publicly identified culprits behind the mess at Anglo Irish hanged, drawn and quartered. Their lavish lifestyles and seemingly reckless disregard for the implications of their decisions seemed clear and unforgivable. Surprisingly, with the presentation of the fuller picture, I found myself more understanding of the human dimension to the story. While not able to accept the reckless actions, one comes away with a fuller appreciation of how small risks lead to larger risks and how personalities combine to catalyse specific and fatal outcomes. The failure of regulators and of the government to deal with the developing situation and their own culpability is made blatantly clear. In both of their cases, intentions may well have been laudable, but the capacity to undertake the hard and measured decisions to deal with the crisis at the appropriate time and in an effective way were crucially lacking. Lack of information and a recurring need to choose the seemingly least damaging solution lead to not just wrong, but potentially disastrous results for all parties. Unwillingness to gain a full understanding, or willingness to countenance borderline illegal activities in hope of a future salvation that will excuse such actions by regulators and politicians are identified. The parallel with the way in which decisions are made and justified within Anglo is hard to miss. While the government operates with the misperceived interests of the country and heart, the bank operates with similarly dangerous misdefined interests of shareholders. Both are complicit and held to account. The human face of Anglo is never doubted, we learn that inter-bank rivalries, failures to maintain relationships and implicit instructions from the central bank are (perhaps not unknowingly) misinterpreted leading to what can be judged as clearly illegal in the greater perspective but are muddlier on the firing line.
The book is not an attempt to make apologies or to allow for the excusing of what are deeply illegal and ingenuous actions, but surprisingly they put Anglo and its executives into a broader picture of mistakes, misdeals and inability to comprehend the true gravity of the situation throughout the Irish and european banking community and the financial regulators and the Irish government itself. There is a point when all become victims of their earlier actions and generally helplessly caught up in the current of the larger economic situation - if the books posits any question for the reader, its a matter of when particular actors hit this point of losing control.
Sean Quinn comes out of the story particularly badly. His seemingly all or nothing gamble on taking options on Anglo shares is pictured as a naive move that leads to his manipulation by self-concerned bankers. Anglo's efforts to find a solution to his altruistically presented attempt to take a dominant equity position in the bank are made surprisingly undertandable and desperately necessary (allowing for some sense of paranoia on the banks part). Suddenly the Maple 10 seem far less culpable in this strange affair - in this volume presented as largely names signed to agreements (although some seem to have benefited substantially largely without their own direct intent). Quinn is painted as simple man driven by good intentions but caught up in machinations far behind his control. This portrayal seems somewhat less than plausible given his demonstrable past business acumen. He is painted as no different from many of these rags to riches celtic tiger billionaires. From simple backgrounds, many built commendable firms through hard work and determination. At some point though they, like Sean Fitzpatrick, became deal junkies and just couldn't stop even when the numbers ceased to add up. They all fall victims to the carefully manipulated and contrived financial pictures they were publicly presenting.
Clearly the entire experience is a story of hubris and greed, but Carswell has extend this simple reflection into a deeper appreciation of the times and circumstances that lead smart businessmen to attempt stupid things.
For all the Irish taxpayers wondering where their and subsequent generations livelihoods are being spent and what mentalities surrounded the mad celtic tiger drive for growth, this book is required reading. It is crafted in a most readable fashion and presents a very balanced and surprisingly rational look at what would otherwise be a creative tale, were it not all too true.
on 16 September 2011
I echo the comments made by the previous reviewer, as he has put it so well I don't feel the need to repeat his detailed review.
Suffice to say this is an easy to read, well laid out and impartial. As someone who didn't have a full understanding of Sean Quinns involvement I had previously had some sympathy for him and his family, however, having read what actually happened I no longer do as the full story demonstrates that his downfall was the same as the bankers, the builders and developers i.e. greed. Like the previous reviewer I also found my position soften towards some of the senior management at Anglo as you get a better understanding of their position, although they are still ultimatley responsible.
Overall an excellent read and I would recommend it to anyone with an interest in what happened in Anglo.
on 31 July 2013
If you ran an airline where you only had one pilot on the flight deck, half the numbers of cabin crew, no maintenance and barely enough fuel, you would make more profit than everyone else. Until of course you have a crash.
You can't do that because the authorities won't let you. They know people are very silly and must be constrained from doing dangerous things.
However nobody exercises control on the high-rolling gamblers that fly asset bubbles until they explode with mind-boggling fall-out.
We all knew that things would end in tears, but nobody did anything to stop it.
The elements are dangerous people getting hold of the controls, no regulating authorities that do anything, and the inability of all the prudent people to persuade us to turn back.
You can see all this playing out in vivid detail in this book.
It's shocking the sheer pace of it all, but at least you see the main players being totally ruined.
on 19 June 2014
Anglo Republic: Inside the bank that broke Ireland is an excellent account of how a small Irish lender inflated a property bubble of epic proportions before becoming one of the biggest financial basket-cases in Europe.
Carswell, former finance correspondent of the Irish Times, has marshalled superb sources in order to give readers a ringside seat at many of the meetings and events that drove the Dublin-based lender's phantom success and its ultimate demise. He describes how Anglo Irish became a highly leveraged bet on the future of Ireland's increasingly unsustainable property market, a poster child of European banker profligacy and excess, and nearly brought down the Irish economy.
I particularly liked some of the quotes about the bank's former CEO, Sean FitzPatrick. For example on page 38, Carswell quotes a former director of Anglo Irish as saying: "Sean FitzPatrick felt that it was Sean FitzPatrick plc and not Anglo Irish Bank plc - he felt that it was his bank, that he should call the shots to the board and the management ... He didn't want a board at all." ... He also quotes a former executive as saying: "He had an ego that liked to be lauded. As the bank attracted more attention, the ego inflated. I think there was a lot of venerating at the altar within the bank."
There are parallels with the Royal Bank of Scotland, where CEO Fred Goodwin had an even higher opinion of himself, conflated the institution he managed with his own ego, and treated the board with disdain. There are other parallels between Anglo Irish and Scotland's uber-reckless twins, RBS and HBOS. All three banks prided themselves on their buccaneering attitude to loan approval, which short-circuited the normal credit processes and risk-management practices. It was a great way of ensuring more money could be lent out during the boom times but it didn't look quite so clever after the crash.
Carswell brilliantly describes how Anglo Irish's carefree approach to lending drove other lenders operating in Ireland. To avoid losing market share, profits and credibility with investors, rivals including Allied Irish Banks, Bank of Ireland, Irish Nationwide, Irish Life & Permanent, Educational Building Society (as well as RBS's Ulster Bank unit and HBOS's Bank of Scotland (Ireland)) convinced themselves that their survival depended on lending like there was no tomorrow (though it's debatable whether the two Scottish banks - once memorably described as "suitcase bankers in kilts" by one of Ireland's old school bankers - were followers or leaders in this regard. Some believe that it was their piratical incursions into Ireland in the late 1990s and early 2000s that caused Irish bankers to go off their heads).
Just like HBOS and RBS, Anglo Irish is a bank that has much to answer for and, as with them, it appears that several of its former executives ought really to be in jail. Hopelessly under-regulated when times were good, it was ultimately able to hold the Irish people to ransom.
Even when two former executives - former head of lending in Ireland Pat Whelan and ex finance director Willie McAteer - were found guilty of making soft loans to illegally prop up the bank's share price, they were not sent to jail. They're serving community service instead.
Ian Fraser is author of Shredded: Inside RBS, the Bank That Broke Britain
on 20 May 2013
After having just read Finton 0'Toole's Ship of Fools: How Stupidity and Corruption Sank the Celtic Tiger, this is a great book to follow up on. Also take a look at Hubris which examines not disimilar problems in the UK (with HBOS). There is a lot in common: arrogance and stupidity. Hello Dennis Stevenson!
While Finton O'Toole's book looks at the (corrupt) politics behind much of the bank's actions, Carswell looks at the numbers. Each chapter shows how the bank grew bigger in value (by manipulating the figures) and how it ended up costing the (Irish) taxpayer billions, making it one of worst basket cases (per capita) on the planet. Well done Bertie (Ahern). The boom times have certainly become boomier!
The main protagnist at the heart of the (Anglo) empire was Sean FitzPatrick, CEO and then chairman of Anglo Irish. Like many these bankers, they are just too full of themselves. They surround themselves with ýes' men and then collapse when they encounter a wall of 'nos' in the (eventual) real world, where the real numbers make sense! The real world where wealth is created by people who WORK hard (cleaners, nurses, builders, bakers, engineers, teachers, etc).
Not only did Seanie (as he was known, at least by some) not know that Anglo was tied into one of its main shareholders (Sean Quinn) he then tried to bluff him (Quinn) by claiming to his subordinates, "He worships me." In other words, Seanie will sort it out. Seanie didn't sort it out. Seanie made Ireland bankrupt. But he wasn't alone. So save your rotten fruit for some others!
These are the bankers (and politicians, economists) who hold your futures in their hands. Weep. Your future is heading for bankruptcy. The same old heads and the same old hands are still on the same old steering wheels. Nothing has changed. Look at your (indirect) tax bill! They have too much to lose to tell you the truth!
Interesingly, the same quote is used twice in both Finton O'Toole's book and this one; the one where Bertie Ahern told some economists who were warning about the coming catastrophe to go and kill themslves. Good advice; but it was aimed at the wrong people. The people who should really top themselves are the "venture" capitalists who are bleeding us dry!
Jesus said, "Wherever there is a dead body there the vultures will gather." (Luke 17:37). Ireland is the dead body. Make up your mind who the vultures are. They are probably feeding on you right now!
on 25 July 2013
I bought this book over a year ago, read it, and archived it. I didn't bother to write a review at the time, though had I done so, it would have been very positive. In the last few weeks (july 2013) after the publication of the Anglo Tapes, I re-read the book, found I had forgotten large tracts of it, and really enjoyed the read. It was tense, hilarious at times, shocking at others, but overall an essential bit of study for anyone who wants to understand what went on at Anglo, and in Ireland in general during the boom years. Well written, full of good detail, and hard to put it down once you get into it. Highly recommended.
Anglo Republic is a fascinating read for anyone interested in the present Irish crisis and how it unfolded from a wider banking perspective and within a single financial institution. Carswell has amassed amount of information on the company and how it operated, included access into board meetings, email between key players and dozens of interviews. He does a very good job at putting a shape to all this information, producing a compelling narrative that details what went on in and outside the bank. Crucially he manages to weave the main characters, their motivations and actions, into the story to lift the book up out of a rather dry history. Sean FitzPatrick, David Drumm, Sean Quinn, Pat Neary and Brian Lenihan all figure prominently. What is particularly interested is the ways in which FitzPatrick, Drumm and Quinn schemed to try and save themselves and their personal fortunes whilst trying to keep a sinking ship afloat. Where the book is a little thin is with respect to wider analysis and judgement. Carswell describes in great detail Anglo's rise and fall, but does little to explain it; he shies away from commenting on the legalities and moralities of actions taken; and he fails to state how he thinks the system needs to changed to stop such a situation arising again. Overall, a book heavy on factual narrative that provides a very useful descriptive analysis of a banking and state failure. It's also a book that should perhaps come with a health warning: 'likely to make your blood boil'.
on 20 November 2012
I thoroughly enjoyed this book, despite all the anger it generated as I read it. Simon Carswell did a great job giving a full history of Anglo from its humble beginnings, its mega unsustainable growth, to its downfall and eventually death. It also unfolds the main men behind Anglo, their rise to the top and how they brought a whole country to ruin.
I really did thoroughly enjoy this book, which probably isnt the correct terminology to use as I got so mad to see how unregulated the whole banking sector was during the Celtic tiger years by government officials who were paid massive sums of money to regulate the industry but who took a backseat to it all, yet cashed in their big pay checks.
A really good book for anyone who wants to learn more about the whole Anglo story and the reason why Ireland is crumbling under a massive debt burden because of a few greedy bankers and businessmen!!
on 17 October 2011
I was a little hesitant to buy this book, but I am very glad I did.
It is well paced and paints a clear and useful picture of the personalities that shaped Anglo and led to its demise - Simon Carswell has done an excellent job of telling the sorry tale.
Absolutely not! It is a certainty that not one single so-called lesson learned from this tawdry economic farrago will in the long term stop the next motley crew of wealth wannabe's and power and glory craving politicians from falling headlong and hopelessly into another slough of financial despair and at an horrendous cost to ordinary Joe Blog taxpayers.
Simon Carswell's very well researched and narrated book makes it quite evident from the early days of Sean Fitzpatrick's reign of crass financial management that it was as plain as a pikestaff that his business model had more holes in it than a colander and was guaranteed to go belly up taking lots of people with it. And yet despite the obviousness of the sure-fire demise, investors, lenders, borrowers, economists, accountants, and especially politicians and regulatory authorities, who should have known better for various reasons with greed being foremost, went merrily along with it, heaping praise and adulation on Mr Fitzpatrick and his cohorts in this tragic case of farcical financial management.
The book details many examples of the toxic property lending deals that Anglo sought out like a rabid dog, and deals with the saga of one of Anglo's customers, Sean Quinn's injudicious acquisition of a huge stake in the company, and the badly conceived way the Anglo Board engineered it's reduction. The directors of Anglo used the banks money as if it was a piggy-bank solely there for their benefit and personal well-being with scant regard for the interests of the shareholders.
All in all a very sorry tale of greed, incompetence, duplicity, arrogance and downright criminality that should never have got off the ground but as sure as eggs are eggs will happen again soon and we will be given the same old spiel "a lesson has been learned". Oh no it hasn't!
The goings on revealed in this book tend to make one angry as you go along because of their imbecility but, nevertheless, this is a darn good read of "how not to run a bank".