Dr. Donal Donovan:

-----in suggesting anything to committee members. I think it is unlikely - I may be wrong - that any smoking gun will emerge in the sense that a huge amount of knowledge is available, and written about, on exactly what happened and why, who was to blame and the institutional and other failures. I do not know if anything new will emerge.

I used to think an inquiry was not necessary. This was my view after having worked on the Honohan and Nyberg investigations. However, over the past two or three years, I have come to the opposite view. An inquiry can be very helpful. Why? There are three reasons. There are many people who think there is a conspiracy which is waiting to be uncovered, that there are some dark secrets and a true story of what really happened and that if we had an inquiry we would uncover this. My personal view is that this is unlikely. People, however, need to see that this is the case. They need to be aware that there were catastrophic policy failures, to see it for themselves and to be made aware of it. Not everyone, in fact most people, will not have read the Honohan and Nyberg reports. I am sure very few people will have read our book. This is the first reason.

The second reason is that it is important that the individuals concerned who have, by and large, not appeared on the public record do so, and come and explain what they did. I expect many of them will acknowledge very serious mistakes. It is, again, important for public confidence that this happens. It is a cathartic effect but it is an important one to enable us to get over this whole thing.

The third thing is more of a suggestion. I think I made it in one of my media contributions. In addition to going back over what happened, which is necessary, it would be important if the inquiry in its conclusions addressed the question of what needs to be done to avoid a similar repetition in the future. We all know about lending and property bubbles and banks not being regulated. We all know this and this will be watched. However, there was something deeper, in my view, happening at the time. There was a failure of the economic policy making process. This involves Government institutions. Risk analysis was not undertaken. Scenarios that were central were too comfortably adopted. There was groupthink and a shutting down of concerns. All of these things were part of the culture in policy making. It would be very helpful if the inquiry were to consider some of these questions and ask itself what fundamentally needs to be changed in the Irish approach to some of these things to ensure that another crisis of whatever source-----