Details of transactions between Anglo Irish Bank and Irish Life and Permanent in March 2008, were to be kept "tight as a duck's ass", in case the financial markets might hear of them, Dublin Circuit Criminal Court has heard.

Recordings of telephone calls involving executives from Anglo were played to the jury in the trial of the bank's former chief executive, David Drumm.

He denies a conspiracy to defraud and false accounting in relation to transactions between Anglo, IL&P and Irish Life Assurance in September of the same year.

The Prosecution alleges he conspired with the former chief executive of IL&P, Denis Casey, Anglo's former financial director, William McAteer and John Bowe from Anglo's Treasury Department, to create the illusion that customer deposits in Anglo were €7.2 billion euro greater than they actually were, in order to deceive investors, depositors and lenders. 

Anglo's former director of Treasury, Matt Cullen continued his evidence to the jury today. A number of recordings of telephone calls were played to him.

The calls started in March 2008, coming up to Anglo's half year end when the bank would have to report its figures. Senior people in the bank were trying to come up with ways to increase Anglo's corporate deposits - which look better on a bank's balance sheet than loans from other banks.

On the first call, Anglo executive Peter Fitzgerald spoke about all the "wide and wonderful possibilities" open to them. There is discussion about the transactions that are to be done with "Permo". 

Senior executive John Bowe remarks that the only issue they have to think about is the Financial Regulator, but he says the Regulator is more or less saying "I'm not looking, do what you want."

On a later call, Matt Cullen says Anglo is looking to "show the best picture it can".

The court has been told that Anglo and IL&P agreed to carry out a series of transactions worth €750,000 in March 2008.

Money was to be transferred from Anglo to IL&P and then back into IL&P via Irish Life Assurance. 

The jury also heard calls between Mr Cullen and his counterpart in IL&P, Dave Gantly. In the calls, Mr Gantly remarks that "the walls have ears in this climate"

He recommends that it might be better to "disguise" the payment as several smaller payments. Mr Gantly also tells Mr Cullen that the transactions have to be kept "as tight as a duck's arse" in terms of the people who know about them.

Mr Cullen told the court this was because there was concern that it would get out in the market.  He said the banks were very nervous at the time. 

He also said there was concern that internally in the banks people would start asking questions if they saw this huge transaction between IL&P and Anglo.

He said he was sure the Central Bank and the Financial Regulator also did not want it getting out to the market.

In a later conversation between Mr Bowe and Mr Cullen, coming up to September 2008, when the transactions at the centre of this case took place, Mr Cullen tells Mr Bowe that IL&P might do a transaction worth €6bn, instead of a lower sum previously suggested. 

Mr Cullen says Mr Gantly told him "you might as well be hung for a sheep as a lamb". 

Mr Cullen tells Mr Bowe that Mr Gantly asked if Anglo would be there for them at the end of the year. Mr Bowe says they will "if we get to the end of the year."

The court heard that Anglo had been pursuing up to 60 initiatives to try to get funding, but by September they were only left with one option - to carry out the transactions with IL&P.

At a meeting in September 2008, Mr Cullen said Mr Drumm was asked if the Financial Regulator was aware of the plan. 

The court heard Mr Drumm said "What choice do we have?" and said another executive would talk to them.

In September 2008, the court heard Mr Bowe telling officials in the Financial Regulator's office that the situation faced by Anglo was "not a run" but the worst-case short of a run on the bank.

The jury is expected to hear further telephone calls tomorrow.