Professor John FitzGerald:

There were two possible outcomes. One was if the world had a normal type of recession or slowdown and the other was if there was a financial collapse. The world not having a financial collapse was what all the forecasts we were using were suggesting. None of the major institutions on which we relied - we did not have expertise in that area - were suggesting a financial collapse when we put the thing to bed in March or April 2008 and we relied on that. While we did include a scenario in respect of liquidity constraint, it was much too mild. We should have seen there were two possible scenarios. However, in May, after the publication of the medium-term review, I attended a meeting of the organisation of which I now am president in Europe and what I heard there from the other economic institutes in Europe suggested things were substantially worse. There was a particular presentation by an economist from the National Institute of Economic and Social Research in London which looked at how a financial collapse in the United States could ramify to Europe and would have a much more dramatic impact. Immediately after the publication, I became aware that the rest of the world was contemplating matters being much worse and then, six weeks later, in a quarterly economic commentary, we stated we thought there was going to be a recession and that it was clear we were wrong. We took numbers from outside which proved to be massively wrong and relied on them and did not contemplate the other outcome, which unfortunately, we now know happened.