Professor John FitzGerald:

Six months later we knew. In 2010, NAMA took the first tranche of loans from the banks at a discount and that suggested the hole in the banking system was €33 billion. We relied on the Central Bank's judgment in this regard. However, over the summer and into the autumn it became clear that the hole in the banks was going to be much bigger and we ended up putting €64 billion into the banks. We relied on Central Bank numbers. If we had known it was €60 billion we would have been talking about bailout, but we did not. That was an issue on which we would have needed inside knowledge to know how big was the hole. We knew - we would have talked about that in the summer 2010 update of the medium term review - that it would have been conditional and we would have recognised that we did not know the answer on that. The State had funding which would have seen it through to a number of years if it had been only €33 billion but when it became clear that the amount was €64 billion then a bailout became essential.

In terms of the debt, as it has turned out, because the interest rate is so low, the burden of the debt is substantially lower than we anticipated at the time. The debt interest is much lower than we had anticipated because an exceptionally favourable deal was done on the promissory notes where, basically, we are paying no interest on the €25 billion. In regard to the debt interest payments, it is what one pays on the debt that is important where the interest rate is low.