Professor Patrick Honohan:

We know that there will be a public inquiry on the banking matter. What has happened up to now? There have been a number of inquiries. The Nyberg report looked into the banks. My own inquiry implicitly looked into the banks, even though it was looking at the regulatory system, but it threw a lot of light on it.

From recollection, the two biggest banks did conduct look-backs. They got external people to look back at their internal processes and they made good and fine recommendations. How on earth could such apparently clever and able people have got it wrong? Was it a lack of communication and what were the incentive structures? It is still hard to understand how it could all have gone wrong, but we sort of know.

When Mr. Nyberg came to do his inquiry, the Central Bank suggested to him that we could perhaps fund an extensive look-back because he would need that. Mr. Nyberg's approach was not to involve the Central Bank. He probably considered that the Central Bank was part of the problem so he did his own inquiry. When he undertook his own inquiries, it did not seem as if we had a lever to do something that would get to grips with it in any way.