Professor William Black:

Yes. Back in the time machine, as the Deputy will recall, when the crisis originally broke out, in Europe the meme was that it is all the stupid Americans. Europe was clean and it was all about those idiot Americans and sub-prime lending and so on. That has changed a fair bit. My point was that Lehman Brothers precipitated the crisis stage but it would have been far worse if the crisis had continued to build for another two years. In the Irish context, the worst banks had losses well in excess of GDP. They were simply becoming big banks, vastly bigger than the economy. If that bubble expansion had gone on for another two years, think what the losses would have been. For example, in the Icelandic context when Lehman Brothers precipitated the failure, the bank had ten times the GDP of Iceland and it was growing at more than 50% a year. With compounding, when something grows at 50% a year, it doubles in size approximately every nine months. If the expansion had gone on for another two years, it would been more than 40 times the GDP of Iceland. The losses per person in Iceland would have been hundreds of thousands of euro. Everybody there has an EU passport and, therefore, pensioners would have been the only folks left.