Boomerang_ Travels in the New Third World - Michael D. Lewis [53]
What Keogh learned remains both the most shocking and the most familiar aspect of the Irish catastrophe: how easily ancient financial institutions abandoned their traditions and principles. An upstart bank, Anglo Irish, had entered their market, and professed to have found a new and better way to be a banker. Anglo made incredibly quick decisions: an Irish property developer could walk into Anglo’s office in the late afternoon with a new idea and walk out with hundreds of millions of euros the same night. Anglo was able to shovel money out its door so quickly because it had turned banking into a family affair: if they liked the man they didn’t bother to evaluate his project.
Rather than point out the insanity of the approach, the two old Irish banks simply caved to it. An Irish businessman named Denis O’Brien sat on the board of the Bank of Ireland in 2005, when it was faced with the astonishing growth of Anglo Irish. (Anglo Irish was about to double in size in just two years.) “I remember the CEO coming in and saying, ‘We’re going to grow at 30 percent a year,’” O Brien told me. “I said how the fuck are you going to do that? Banking is a five-to-seven-percent-a-year growth business at best.”
They did it by doing what Anglo Irish had done: writing checks to Irish property developers to buy Irish land at any price. AIB, which had paid its lending officers based on how many dollars they lent, opened a unit nicknamed ABA (Anybody but Anglo), dedicated to poaching Anglo’s biggest property developer clients—the very people who would become the most spectacular busts in Irish history. In October 2008 the Irish Times published a list of the five biggest real estate deals from the past three years. Allied Irish lent the money for ten of the fifteen, Anglo Irish for just one. On Irish national radio the insolvent property developer Simon Kelly, who personally owes 200 million euros to various Irish banks and who belongs to a partnership that owes another 2 billion euros, confessed that the only time in his career a banker became upset with him was when he repaid a loan, to Anglo Irish—with money borrowed from Allied Irish. The former Anglo Irish executives I interviewed (off the record, as they are all in hiding) speak of their older, more respectable imitators with a kind of amazement. “Yes, we were out of control,” they say, in so many words. “But those guys were fucking nuts.”
Gary Keogh thought about how Ireland had changed from his youth, when the country was dirt poor. “I used to collect bottle caps,” he says. “Now the health service doesn’t even bother to take back crutches anymore? No! We’re far too wealthy.” Unlike most people he knew, Keogh had no debts. “I had nothing to lose,” he says. “I didn’t owe anyone any money. That’s why I could do it!” He’d also just recovered from a serious illness, and felt a bit as if he was playing with house money. “I had just got a new kidney and I was very pleased with it,” he says. “But I think it must have been Che Guevera’s kidney.” He describes his elaborate plot the way an assassin might describe the perfect hit. “I only had two rotten eggs,” he says, “but by God they were rotten! Because I kept them six weeks in the garage!”
The AIB shareholders meeting of March 2009 was the first he’d ever attended. He was, he admits, a bit worried something might go wrong. Worried parking might be a problem, he took the bus; worried that his eggs might break, he designed a container to protect them; worried that he didn’t even know what the room looked like, he left himself time to case the meeting hall. “I got to the front door early and had a little recce,” as he puts