Professor Philip Lane:

There is a two-level answer there. One is, if we had our own national Central Bank, that could have made it easier to deal with local funding because the Irish Central Bank could have printed as many Irish pounds as it had wanted, but it could not print dollars, sterling or whatever. If we had the same kind of credit boom that included a lot of foreign funding, that foreign funding would have been in foreign currency. In the same way that Iceland could not stabilise its banks in terms of its foreign funding and in the same way as in emerging market crises, when one has foreign currency debt, the fact that one has a local central bank does not get one that far. There is a mix. The general issue is "Yes".

Also in my report, I pointed out that, in the 1990s, we had the Scandinavian banking crisis, we had the east Asian crisis, we had the Mexican crisis and we had the Russian crisis. Going into the euro, there had been all sorts of financial crisis in recent history, in part reflecting the fear that, with more and more cross-border finance, maybe more accidents would happen. There is a history of the euro by Professor Harold James, about the committee meetings in the 1980s and 1990s up to the point of the euro. The fact that those committee meetings decided not to deal with having a common crisis mechanism was a euro system design flaw. The fact that the euro system did not have a crisis mechanism meant that, from word go, the responsibility was at home. If there was not a European crisis mechanism, we needed a national level crisis mechanism, a rainy day fund and so on. There was also a question of under what conditions we could use ELA. That is a question to engage on with the regulator.