A former non-executive director at Anglo Irish Bank has said it's his understanding that the Financial Regulator was anxious to reduce Sean Quinn's untenable stake in Anglo.

Gary McGann is giving evidence at the trial of former Anglo executives Willie McAteer, Pat Whelan and Sean FitzPatrick who deny providing unlawful financial assistance to 16 individuals to buy Anglo share in July 2008.

The jury's heard the purpose of the transaction was to dilute the 29% interest Cavan businessman Sean Quinn had built up over concerns his huge stake would de-stabilise the bank.

Mr McGann has given evidence that it was the view of the Anglo board that it was important to keep the regulator informed of developments.

The regulator Pat Neary has said he only found out about the extent of Sean Quinn's investment six months after the board was made aware of it.