Evidence that Irish Banks & Government acted in concert to fuel Reckless Lending

Two years prior to the commencement of the Banking Crisis, the Irish Government was subjected to an intensive lobbying campaign by the Irish banking industry to change legislation in order to allow banks to borrow from new sources to lend on to customers.
Irish banks, including the now disgraced Anglo Irish Bank and AIB, and large international banks including Depfa, which was nationalised in Germany, successfully lobbied the then finance minister Brian Cowen to amend the law.
The 2007 amendment to the Asset Covered Securities Act 2001 widened the scope of the “covered bond market” in Ireland, through which banks sold bonds, or IOUs, that were backed by mortgages at the banks.
Allegedly, the main aim of the campaign, orchestrated by the Irish Bankers Federation (IBF), was to prevent the loss of jobs and business in the Irish financial services industry to countries with more wide-ranging legislation governing bonds.
The legislative changes, introduced at the peak of the boom, allowed banks to use commercial property loans as collateral for the bonds for the first time, enabling them to borrow more in the markets.
This enabled Anglo, a commercial property lender, to access new sources of borrowings to fund the bank.
Heavy borrowing in the global markets was one of the causes of the banking crisis and ultimately led to the ill-advised Government bank guarantee and the EU-IMF bailout.
Letters released to The Irish Times, in early 2006 under the Freedom of Information Act show the intensity of the lobbying and the access the banks had to Mr Cowen.
Offering his views on the legislation, the then chief executive of the Bank of Ireland, Brian Goggin, wrote to the Minister in May 2006 thanking him for attending a private dinner at the bank’s head office in Dublin three days earlier.
“I can honestly say that I find it hard to remember when I have had as enjoyable, insightful and stimulating few hours’ discussion,” said Mr Goggin. “You raised a particularly interesting issue, indeed challenge, on the question of influencing or at least informing the debate on where and how we take forward this great project that is modern Ireland – a place that is so very different and has so much greater potential than earlier generations could have dreamed of.”
Mr Goggin described the legislation as “enlightened and innovative” and a model for the political, public and private sectors.
David Drumm, then chief executive of Anglo, wrote to Mr Cowen in October 2006 expressing concern that the changes to the legislation had fallen behind schedule.
“From the bank’s perspective, covered bond issuance has been identified as a key part of its funding strategy going forward,” he wrote. “Covered bonds are a cost-effective and reliable form of long-term funding that would provide the bank with access to a new investor base.”
The minister’s private secretary replied, saying Mr Cowen shared his views and “further modernisation” of the legislation was critical to Ireland’s competitiveness and “also as an alternative source of long-term funding for our banks”.
In a letter that same week, then Taoiseach Bertie Ahern told Mr Cowen that banking industry representative groups had raised concern with him about “slippage” in the work on the legislative changes. He asked what could be done on the matter.The IBF wrote to Mr Cowen on October 2006 saying that one of the benefits of building an Irish covered bond market was that it could create “new instruments” enabling Irish mortgage lenders to fund the demand for mortgages. ^the above is extracted from an Irish Times Article, by Simon Carswell on 12th February 2011^

Fast-forward to 27th February 2015:
Bank of Ireland has reported pre-tax profit of Euro 921M for 2014;
Brian Cowen is being called before the Oireachtas Committee of Inquiry into the Banking Crisis in April 2015.