A former director of treasury at Anglo Irish Bank has told Dublin Circuit criminal Court that he was asked by David Drumm to contact other Irish banks to try to secure deposits for Anglo in March 2008.
Matt Cullen said Mr Drumm, the bank's former Chief Executive, sent an email on 16 March 2008, to senior people in the bank, telling them the Governor of the Central Bank had asked them to look at how Irish Banks could help each other, as the financial crisis deepened.
Mr Cullen said he knew transactions between Anglo and Irish Life and Permanent in 2008 were part of the "green jersey", where the banks helped each other out.
Mr Drumm, has pleaded not guilty to conspiring with others to defraud and to false accounting in relation to transactions worth €7.2bn between Anglo Irish Bank and Irish Life and Permanent in September 2008.
He has denied conspiring to falsify the bank's balance sheet to make it look like deposits from non-banks were bigger than they were.
The prosecution alleges that money was circulated at lightning speed in September 2008, between Anglo Irish Bank, Irish Life & Permanent and Irish Life Assurance in completely unreal transactions, to deceive investors, depositors and lenders.
Mr Drumm admits that he authorised the transactions at the centre of the case. But he disputes that they were fraudulent or dishonest or that there was any dishonesty in how they were reported.
Matt Cullen said he first became aware there could be problems ahead, when he got a phone call in July 2007 about the "inter-bank market", where banks lend each other money, being in trouble.
He said he knew if that market had a problem, there were serious problems ahead. Mr Cullen told the court that following a meeting between Anglo, the Central Bank and the Financial Regulator in 2007, an initiative was set up in the bank to look at ways of getting funding.
The financial situation continued to worsen during 2007 and early 2008. Mr Cullen gave evidence about an email sent by David Drumm on 16 March 2008, asking people to put some thought into what the Governor of the Central Bank had asked them to do, to look at how Irish banks could help each other.
In the email, Mr Drumm said he wanted to get into dialogue with the Central Bank and other CEOs sooner rather than later. The situation worsened on 17 March, when the share price of Anglo and other banks collapsed in what became known as the "St Patrick's Day massacre".
Mr Cullen said Mr Drumm asked him and others to go to their contacts in other Irish banks and talk to them about "back to back transactions". He explained that these transactions would involve Anglo giving an "inter-bank" loan to another bank, and then getting that money back from the other bank's corporate division as a corporate deposit. The jury has heard that healthy corporate deposits look better on a bank's balance sheet than loans from other banks.
Mr Cullen spoke to his contact, David Gantly in Irish Life & Permanent about carrying out such transactions at the end of March 2008, over Anglo's half year end. The two institutions carried out a series of transactions to the value of €750m. This was around twice the size of the limits placed on transactions between the institutions at the time, he said.
Mr Cullen said that in early April, there was further contact from the Central Bank asking how co-operation between the Irish banks was going and if they were coming up with funding initiatives.
Further transactions were carried out between Anglo and IL&P in late June 2008 which was IL&P's half year end. The court heard IL&P had been told by the Central Bank not to show "effing reliance" on European Central Bank funding. Mr Cullen said Mr Gantly told him it was part of putting on the "green jersey" where banks would help each other.
The crisis worsened through the summer. The court heard Anglo had come up with a number of potential funding initiatives, but these all fell away as the financial markets "went into meltdown".
The only plan left by the end of September 2008, when Anglo was due to report its figures for the year, was for Anglo to carry out a series of transactions with IL&P.
The €7.2bn euro transactions were carried out between 25 September and 30 September. Money was sent from Anglo to IL&P and then returned to Anglo on behalf of Irish Life Assurance.
Mr Cullen agreed that Anglo got €1.4bn in emergency funding from the Central Bank on 29 September, before the Government guarantee was implemented on 30 September.