Professor Patrick Honohan:

I am glad that Deputy Doherty pointed out that we set deliverables and they have been delivered because that could give a misleading impression. The sorts of deliverable that we set were for the banks to provide us with a report that would explain what they are doing. We would comment on those and the banks in turn would have to make a further report stating what they would do, what number of people they would hire and what protocols would be put in place. Inspectors have gone into banks and listened to the conversations that were taking place to ascertain whether the process was adequate and used international expertise to engage with people to find a solution. I am probably not describing the process adequately. We are quite concerned about this development. I was also concerned to read and hear the evidence that bank directors were trying to avoid the use of some trigger words around debt. If not, if it was the case that they were simply saying they would get all the money back, they are not going to get all the money back and that is why capital was invested. At the same time it is very important that this is not a give-away by the Government because as members are aware, the Government does not have any spare money to give away.

Deputy O’Donnell rightly said that we should not pay lip-service or engage in grandstanding. That is not what we are doing but our tools are ones of engagement with the banks. The Chair wants us to come out with targets. We are working on targets but I do not want there to be too much reliance on targets for the banks to meet because they will meet the targets, but if the target is a simple one, they will meet it in a way that does not deliver the goods. Apart from what we have said about the directors, I do not think it is the case that the banks are reluctant to do this. They are hesitating because they are not sure which way to jump as they do not yet have a good way of sorting the debtors that need a fundamental and permanent restructuring from those that can be brought back on track in a reasonable period.