The Icelandic volcano has been seen by many as an act of God, but disturbing new evidence suggests a link to Ireland’s troubled banking industry and further highlights the scandal of Ireland’s financial fall from grace.

It has now been revealed that Eyjafjallajokul  [pronounced Ice-land-ic Vol-can-oh] was in fact owned jointly by Irish Nationwide and Anglo Irish Bank. Documents uncovered by the new board at Anglo have shown that the two banks together paid three hundred million euro for the mountain.

It appears that the deal to buy the mountain was personally negotiated by Michael Fingers and Sean FItzDisappearingTrick, chairmen of Nationwide and Anglo respectively. The two banks financed a complex of luxury appartments inside in the crater.  Investigators in Iceland are now probing the possibility that the volcano may have been originally triggered by the excavation of an underground car park.

The development called The Ashdowns: A Gracious New Style of Sulphurious Living, was launched in 2005 with a raunchy billboard advertising campaign featuring a Celtic Tiger couple in a number of suggestive situations. In one, a man and woman sit at a table and are seen to play footsie. The man looks expectant. Through an open window, a river of lava is seen to flow past. The caption on the billboard reads “The volcano isn’t the only thing about to erupt” In another, the couple are shown in a scantily clad pose and the woman appears to say “Did the earth move?

Residents of The Ashdowns complain that the development has turned into a ghost estate. Every day they spend hours clearing the magma from their patios. These latest revelations of the profligacy and loose lending practices are another sorry indictment of the management of Irish financial institutions. Throughout the property business, similar stories abound. As the procession of loans into NAMA gathers steam, some details of how once proud companies became a byword for incompetence, are starting to emerge.

What immediately strikes the observer is how anyone in the banks sanctioned developments which could clearly never succeed. Some notable examples include:

  • Bank Of Ireland loaned €20 million to Superman to complete the purchase of a large tract of land in Roscommon, despite the fact that it was common knowledge that the property had large deposits of Kryptonite.
  • Another unnamed developer was able to borrow money for a €1 billion shopping complex on Io, one of Jupiter’s moons. The complex – called iO-pener was never started due to complaints from local pressure groups who said that the increasing traffic in the area would disrupt attempts to launch a surprise attack on the human race.
  • The final nail in the coffin for Anglo Irish Bank was the revelation that it was heavily involved in a plan to build an exclusive luxury apartment and golf-course complex, which could only be accessed through a wardrobe.

Ambitious developments were often assured with no collateral whatsoever, which meant the banks had no way of recovering the money if the loan failed. The volcanic apartments complex was apparently guaranteed with a note from Sean Fitzpatrick to himself which just read – “Ah there you are, good man yourself.”

Even worse examples exist. One developer received a €100 million loan and managed to negotiate that he only had to pay it back “when the cows came home”. As the recriminations fly, the focus is now on how the regulatory authorities failed to see the bad practice going on at the highest levels in Irish finance. The Financial Regulator at the time when a lot of these loans were approved –  a large toy Panda named Mr. PloopyPants – has been heavily criticised for his role. He has since argued that he was rarely brought out to play and spent most of the years of the property boom under the stairs with the Ludo.

But that is just one person not doing their job. As RTE’s Frontline programme this week pointed out, an entire layer of auditors never spotted the issues in the banks, or if they did, never spoke up.

That culture of secrecy is changing now. Yesterday a whistle-blower emerged from within the accounting business who has given an insight into the mindset during those heady crazy days of light touch regulation. Speaking under cover of anonymity to a number of news agencies this week, the former auditor made the following comments:

After I became an auditor, I’d be down the pub and all these estate agent types with their tans and stupid blue shirts with the white collars were boasting about all the money they were making even though they only did Foundation Maths in school. It made me sick.

Then Anglo asked me to sign off their accounts and when I asked them why their balance sheet was in a heap,  they said – ‘what’s the matter with you, are you a nerd or something?

So I just put my name to it and after that everything was great. All the women thought I was a mad yoke altogether and I scored all around me.

And the future for the volcano? Eyjafjallajokul has now been transferred to NAMA and it is believed the whole mountain may have to be demolished. This could reduce the risk of further eruptions. Which shows that even an ash-cloud has a silver lining.

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