The former director of finance at Irish Life and Permanent was concerned that his bank would lose money if Anglo Irish Bank "went bust" after the banks engaged in €7.2bn in inter-bank loans, a trial has heard.
Anglo's former head of finance Willie McAteer (65) and the former CEO of Irish Life and Permanent (ILP) Denis Casey (56) and two others are accused of conspiring to mislead investors by using interbank loans to manipulate Anglo Irish Bank's balance sheets.
ILP's former director of finance Peter Fitzpatrick (63) of Convent Lane, Portmarnock, Dublin; John Bowe (52) from Glasnevin, Dublin, who had been Anglo's head of capital markets; Mr McAteer of Greenrath, Tipperary Town, Co Tipperary, and Mr Casey from Raheny, Dublin, have all pleaded not guilty at Dublin Circuit Criminal Court to conspiring together and with others to mislead investors through financial transactions between 1 March and 30 September 2008.
The interbank loans allegedly involved money being transferred by Anglo to Irish Life and Permanent (ILP) and then being put back on deposit with Anglo via ILP's life assurance division.
The transfer would allegedly appear as corporate deposits and not an interbank loan so the bank's corporate funding figure would appear bigger for the bank's year-end figures on 30 September, 2008.
On day 32 of the trial, the jury heard excerpts of a telephone call in which Mr Fitzpatrick discussed the loans with Paul Kane, a liquidity manager with ILP.
During one call, recorded on 25 September 2008, Mr Fitzpatrick asked Mr Kane: "Are we going to be absolutely satisfied that if something goes pop we don't have to sort of give Anglo their... loans and anything else back without getting our money?"
Mr Kane told Brendan Grehan SC, defending Mr Fitzpatrick, that at this point Mr Fitzpatrick introduced the option of "set off" or netting the loans against each other.
The jury has already heard that netting involves consolidating or offsetting the value of two or more transactions, effectively allowing debts to cancel one another out.
Mr Fitzpatrick told Mr Kane: "I'm thinking of offset now. So Anglo goes bust next week and the liquidator walks in and he says 'give me deposits back' and we say 'ah but like we had an agreement', 'prove it'."
"Unless there are letters... or an agreement that we can set off between the two... and the liquidator comes in [and] says give me the money back, we have to give him the money back."
He tells Mr Kane "this has to be documented" adding "so there is absolutely no f***ing confusion in anyone's mind that we can stand over it as a binding agreement".
The court heard that before the two banks did agree in the end to netting the transactions against each other.
The trial continues on Monday before Judge Martin Nolan and a jury.