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As the crisis closed in, Fitzwilliams came to the damming conclusion that his bank, the Irish Netherlands, was too small, much too small, to survive in the long term. There were few options; the last of which was selling out to a larger British or American banking institution. As for the idea of building the bank, organically, into a larger more solid institution, it was totally out of the question given the ongoing crisis.

  He did not want to find himself in a situation like that of Jimmy Cayne, the former CEO of Bear Stearns, who ended up spending more time playing bridge, golf and smoking pot than managing his business. Cayne had been worth almost one billion dollars before the forced buyout of his bank, selling his remaining shares for just sixty one million dollars, a mere fraction of their previous value.

  Looking back his merger with the Dutch bank had been a success, perhaps because linking up with continental partners had not been within the orthodoxy of British or Irish banks, but the idea had paid off bringing new ideas and giving him a broader understanding of international banking, beyond that of his bank’s dabblings in the Caribbean.

  However, given the ongoing crisis, the idea of finding a suitable partner was remote. Banks were licking their wounds; certain of them would not survive.

  It would require a quantum leap to escape from the fetters of City and Wall Street’s traditional merger concepts. But Francis had hammered home his vision of a changing world, not that of conventional globalisation where the West led the dance. New players were already present and beginning to make their weight felt. The Dutch were neighbours and spoke English. However, the thought of a Chinese, Indian or even Brazilian partner was too much.

  As for the rest of Europe it was in just about the same situation as the UK. That left Russia. Francis agreed that at first sight it was not very appetising, but on the other hand it was a new territory; rich in gas, oil, minerals, few competitors and relatively speaking nearby. History had shown the crisis would not last forever and when things started to look up the world would be hungry for energy and raw materials.

  Fitzwilliams decided to speak to his friend Sergei Tarasov, who in spite of his own specific difficulties was optimistic. Had he not alluded to his powerful friends in the Kremlin and in top Russian business circles? Tarasov had brushed aside the difficulties he was experiencing in his UK property ventures; was he unrealistic or was there something Fitzwilliams did not see?

  The banker thoughts turned to Pat Kennedy, his right-hand, the bank’s de facto number two. Kennedy was ideally situated to explore the Russian’s background and business, all Fitzwilliams needed to do was to point him in the right direction.

  As Fitzwilliams pondered the future of his bank the gravity of the crisis in Ireland was reaching catastrophic proportions. The Irish Times cried out for the formation of an emergency government. Cabinet meetings followed one after the other. Bankers were summoned and Brussels was consulted.

  Eamonn de Valera would have turned in his grave. After the nationalization of its major banks the country was bleeding money at an alarming rate. The Irish Stock Exchange was rocked by a series of shocks not seen in decades, in total it had fallen more than eighty percent from its all-time high just eighteen months before. The government wavered as more than two hundred thousand angry demonstrators, five percent of the nation’s population, equivalent to three million in the UK, poured into the centre of Dublin to protest against its economic policies.

  In less than a week it was estimated almost ten billion euros had been pulled out of Ireland by banks, businesses and investors. The Irish Netherlands Holding Bank was amongst those who transferred funds to safe havens. The reputation of Ireland’s Celtic Tiger was in shreds and its reserves dwindled by the hour.

  Elsewhere the economic situation worsened too, banks were collapsing, new scandals were uncovered almost daily and entire countries risked being sucked into the black hole. The three major credit-ratings agencies Standard & Poor’s, Moody’s, and Fitch downgraded Ireland. Standard & Poor’s had already downgraded Irish government debt to negative, forcing the cost of insuring Irish government bonds painfully high.

  Fitzwilliams’ first priority had been to save his bank; Ireland’s fate came a distant second. There was little he could to save his country from the economic tsunami that was overwhelming it, though saving Irish Netherlands meant survival for him and his own. Even the computer manufacturer Dell, one of the Celtic Tiger’s success stories, announced it was transferring its production facilities from Limerick to Poland, which with subcontracting would mean a massive loss of ten thousand Irish jobs.

  From Marbella in Spain, Liam Clancy looked on in dismay. For the majority of his fellow countrymen and women the long party was over and the hangover would be painful, very painful. He himself had suffered the fall in Dublin house prices, already thirty percent down with a glut of unsold properties on estate agents books. Prospects looked grim as high wages and a strong euro acted as a brake, even the system of low company taxes that had attracted multinational businesses to Ireland was beginning to look untenable.

  The blissful over-assertive experts and advisers of banks and investment houses, who had dispensed their smug, and generally biased opinions, on Bloomberg and NBCNews, had been persistently wrong and their grossly overconfident growth predictions now seemed ridiculous. The pretended experts were no longer capable of projecting even the vaguest general direction of stock markets or currencies from one day to the other. For those investors who had gobbed down their euphoric forecasts that pointed to an ever rising curve of real-estate and stock market prices the fun was over; the trajectory turned out to be ballistic, the apogee had been reached and the vessel was plunging back to earth at a stomach wrenching speed, its terrified passengers hanging helplessly on to their seats.

  Within the space of a few months the Irish economic bubble had burst and collapsed into a brutal depression. Its property market imploded, businesses collapsed, banks were nationalized and the cost of insuring government bonds reached staggering proportions. As the country faced financial Armageddon its leaders desperately turned to Brussels.

  Suddenly the Celtic Tiger was the sick man of Europe; infected by the Icelandic syndrome. Banks, including the Irish Netherlands, had overextended themselves, piling up loans, equivalent of ten times the Republic’s total annual economic output. The country’s economy was hurtling at breakneck speed towards a brutal contraction with rampant unemployment threatening every sector of activity.

  Young men and women, the less fortunate members of Liam Clancy’s generation, would face the spectre of Ireland’s age old misfortune; forced emigration, the search for work across the water. Like him many had believed they would become millionaires; instead they would end up on a one-way Ryanair flight to a London bed-sitter.

  For more than two decades Ireland’s economy had experienced a boom unprecedented in the Republic’s short history, as banks, the Irish Netherlands amongst them, lavished loans on home buyers and businesses in the glow of a booming export oriented economy. It was almost as if there were no tomorrows as ordinary Dubliners jumped onto the property bandwagon and real-estate prices surpassed those of Paris.

  It was as though the Irish had abandoned their Christian beliefs for Mammon and were now being punished for their sins as the hand of God meted out a terrible retribution. Banks were nationalized and home owners condemned to negative equity, indebted for years to come, punishment for a colossal speculative binge paid for on the never-never.

  Chapter 5 ARROWSMITH