Professor John FitzGerald:

If the Senator looks at our update of the medium term review in 2010 and the medium term review 2013 - this is what I was specifically responsible for – we tried to take account of what had happened in the financial sector and consider what policy measures should be put in place and where Ireland is going. Research takes time. The ESRI does quality research. That cannot be done in three months. It takes probably a year to do a research project. The Senator could look at the research coming from my former colleagues now on matters such as credit for SMEs and a whole range of papers on micro-economic data. The Central Bank has also done excellent research so that our understanding of the problems posed for this economy by the banking crisis and the failure to resolve it quickly is much better. We will not re-do what the Central Bank is doing. My colleague, David Duffy, has done papers on negative equity. A great deal of research is coming out now. The ESRI woke up and said it had to look at this but it did not want to duplicate what the Central Bank is doing because it is doing very good research now. We have done a great deal of research on this and try to bring it together in the medium review.

In that review one of the scenarios we examined was where the rest of the world did okay and we did not exploit the opportunities. I have forgotten what we called the scenario, the wasted opportunity or something because the banking system was not put right, it looked to us that the problem in the banking system could damage the economy but that was at a macro level. At the same time many of my colleagues are doing research at a micro level and saying it could be a real problem for SMEs although the research suggests that until recently SMEs and credit were not constraining the Irish economy. The problem was that people did not want to invest but our concern in the 2013 medium term review was that the recovery might not be as strong as it could be or might be delayed because the financial system was not available to finance the economy. Post 2008 the Senator will see a lot of research done by the institute, which is relevant and encapsulated in a range of publications.