The Central Bank did not query a report on the liquidity of Anglo Irish Bank, discussed with them by David Drumm at a meeting during October 2008, a witness has told Dublin Circuit Criminal Court.

Stephen Fox, former head of liquidity reporting at Anglo said Mr Drumm, 51, asked him to draft an ad hoc liquidity report in advance of a meeting with the Central Bank in October 2008. 

"The Central Bank didn't query it with me, and if they did I can't recall," he said. 

He said Mr Drumm asked him several questions on the report which showed the bank's corporate and retail funding figures, after he sent it to him by email.

Sinead McGrath BL, prosecuting, read Mr Fox's evidence to the jury at Mr Drumm's conspiracy to defraud trial today as the witness is currently resident outside the jurisdiction.

Mr Drumm, with an address in Skerries, Co Dublin, has pleaded not guilty to conspiring with former bank officials Denis Casey, William McAteer, John Bowe and others to defraud depositors and investors at Anglo by "dishonestly" creating the impression that deposits in 2008 were €7.2bn larger than they were.

He has also pleaded not guilty to false accounting on 3 December 2008, by furnishing information to the market that Anglo's 2008 deposits were €7.2bn larger than they were.

In his evidence, Mr Fox said he was aware of transactions between Anglo and Irish Life and Permanent, but did not know the details and had thought they were customer deposits.

He said the commercial rationale for the transactions was to "put up a higher customer funding figure", replacing interbank funding with customer funding.

Mr Fox's role within the bank was to conduct stress tests and prepare customer funding reports for senior Anglo executives, the court heard.

He explained that these reports depicted both corporate and retail deposits received from clients.

Mr Fox described the very tough market environment in the Irish banking sector during late 2007 into 2008.

"Liquidity had dried up. Banks and trading positions had totally changed. Interbank lending was scarce," he said.

The jury heard that Mr Fox participated in up to five conference calls daily during September 2008.

He said these were necessary as it was a time of great stress, and therefore vital for management to be aware of liquidity ratio.

"The most stressful days were those leading up to September 30, 2008, the flows out were unprecedented for a bank our size," he said.

The jury then heard the evidence of Emma Hillier, a former supervisor at Anglo's Isle of Man subsidiary. Diane Stuart BL, prosecuting, read Ms Hillier's evidence to the jury.

The witness described a transaction in which almost stg£1m was transferred from the Anglo Isle of Man branch to IL&P on 25 September 2008.

She said the request to carry out this transaction came in a direct email from Mike D'Arcy, someone in Anglo's office in Dublin, whom she had never heard of before.

Ms Hillier said she had never been contacted directly about such a transaction before. She also said she did not get the regular group email, and instead Mr D'Arcy emailed her directly which she thought 'was strange".

" Also, it wasn't usual to place the funds with one bank only, they were usually spread to reduce the risk," she added.

Last week the trial heard that Mr Drumm accepts the facts of the 2008 transactions between Anglo and ILP but he disputes that they were fraudulent or dishonest.

The trial continues before Judge Karen O'Connor and a jury.