Peter Mathews (Dublin South, Independent) | Oireachtas source

We talk about the value of property. I think Professor Honohan would agree that it is the capitalisation of the yield. In other words, if one has a semi-detached house, it yields €2,000 rental per month. That is €24,000 per year. At a 7% yield, that is a value of €360,000. Let us do a quick check. What is the average income of a family if such a house was to be owner-occupied? It could be €80,000. What is four times' that? It is €320,000. One is in the ball park. They are the macro-prudential templates that keep everything safe but the members of boards were where it all went wrong. These members probably did not even understand balance sheet structure and engineering. If they had, somebody would have said "Stop". Alternatively, perhaps they were greedy and wanted a return on equity. This meant that they piled in by issuing bonds at €61 billion in the case of Anglo Irish Bank to get an extra return on equity. Then they are not bankers. Only 18 months to two years ago, one of the directors of Bank of Ireland came from the betting industry. It is funny, is it not? Twenty-five years ago, that would have been unthinkable. A representative of the largest betting organisation in this country that offers online gambling is brought on to the board of Bank of Ireland. One could not make it up.

My last point concerns advisers and auditors. Where where they? Were they asleep? Did they not recognise balance sheet structure and loans-to-deposit ratios? In England, the weighted average loans to deposits was about 135%.