Professor John FitzGerald:

I do not know. They should have been in operation. Up until 2009, I was uncertain as to their extent. First, I had not checked the legal powers of IFSRA and the Central Bank. One of my concerns about the banking crisis was the extent to which competition coming from foreign banks outside of Ireland drove Irish banks to do stupid things to hold their market share. One of the things I was not sure about was whether the Central Bank - I now know what powers it has and it has powers in this area - had power to regulate the banks. It could say it had powers to regulate AIB, because it licensed AIB, but did it have powers in regard to Ulster Bank or Bank of Scotland (Ireland)?

I asked Axel Weber, then governor of the Bundesbank, when he was in Dublin whether Europe needed more co-ordination. His formal answer was, "You just get on to the Financial Services Authority, FSA, in London and tell them what to do."

Talking to him afterwards, it was clear that while that was the theory, had the Central Bank taken action it might have run into difficulties with the FSA saying it was being mean to British banks and it was a competition issue or whatever. Although I do not know how it would have operated in practice, they should have done it. Had they protected our banks, the ones that landed in our laps, we would not have the problem we have today. It was a failure of regulation. It is unclear how it would have operated in a world with banks from different countries with different regulators. That is why the achievement of European banking regulation is a great leap forward. I know that we failed, and that had we taken action we could have stopped it, but I am not sure of the details of how, precisely, it would have worked out.