Peter Mathews (Dublin South, Fine Gael) | Oireachtas source

It is not a criticism; it is an observation.

The witnesses are welcome. Yesterday, I said I had a feeling of unreality listening to contributions. It was akin to the film “The Truman Show”. Today, I feel I am in a fog. The reason is that this is the first opportunity to have an appraisal of the job of national interest directors on the board of Bank of Ireland. They have been in place since 2009. One could ask what has happened in that period. First, what is the job description of the national interest directors? We have discovered they do not have one; it is vague.

Second, what has happened in the period to be appraised? The bank effectively went bankrupt and the biggest exercise that had to be carried out was, first, to get an injection of share capital from the State, which it did. I was at the annual general meeting where it was approved. It was a joke that the life-saving injection had to be approved by the shareholders. It is similar to having a formal meeting to approve life support for a patient in a hospital. It was absurd, but people went through the charade.

The next big exercise was the transfer of the NAMA loans to see how it would affect the bank. They are the overview parameters. The Bank of Ireland had a line-up on foot of the PwC exercise of €16 billion of loans to go into NAMA and in the three months before the end of 2009 that figure was, unbelievably, revised downwards to €12 billion. I asked myself why. The question was if €4 billion less loans are being transferred to NAMA at a 30% discount it meant there would be a €1.2 billion less requirement for capital, which would keep the bank out of State majority control. That was the first thing. As board directors, perhaps collectively and individually, they should have spotted that and wondered if it was a good judgment call. It was a bad judgment call because the prudential capital assessment review that took place in March 2009 indicated that if Bank of Ireland got approximately €5 billion before the year end all would be well and it could stay outside State control. That was not a very honest exercise. It would be much better if the bank had sufficient capital to do what it needed to do.

Other speakers this morning asked where the bank stands now as regards writing down to honest collectable amounts the loans it had advanced over the period up to 2008. The answer to that lies hidden somewhere in the fog of what the executive management, Mr. Richard Boucher, brought to us a few weeks ago. Does either of the witnesses know the overall loan book of the bank off the top of their heads?