THE Government was lambasted in the Dail yesterday for paying 7.4m to Merrill Lynch for advice that the Anglo Irish was financially sound shortly before the bank was nationalised at great expense.
The Labour Party flaunted documents released under the Freedom of Information Act during the report and final stages of the NAMA bill.
The department paid 7.4m to Merrill Lynch to be told Anglo was "fundamentally sound" days before its nationalisation, said Labour's finance spokeswoman Joan Burton.
Senior officials then wrote to the European Commission to inform them that the bank was sound, but also said that it was a "niche" operator in the Irish market -- whereas the Finance Minister Brian Lenihan had defended its nationalisation on the grounds that it was of "systemic importance". "In a nutshell, this is why we need oversight," Ms Burton said.
Michael D Higgins TD said it was a disgraceful to describe the Anglo as being of "systemic importance" as it was no more systemic than a dandelion.
Failed bank got all clear in report that cost State €7.4m - National News, Frontpage - Independent.ieMs Burton said the key lesson from history was that unless there were high levels of transparency and oversight, "the whole exercise is likely to prove a failure".
Banks were already "putting the thumbscrews" on small businesses around the country, she said.
Mr Lenihan replied that Anglo was "a systemic bank at the time of nationalisation" because it was a bank with a balance sheet of 100bn, including 50bn in deposits from 250,000 customers.
"The idea that the collapse of such an institution by a government would have no implications is utterly and totally fallacious," he said.