Professor Eamonn Walsh:

I think this goes back to the quote I had from the Nyberg report. Certainly how I would understand it is that largely it appeared that there were these limits in place but they were being ignored by the regulator. In other words, the quarterly reports that would go to the regulator or whatever would make it clear that there had been breaches of these limits, that auditors were basically seeing what was going to the regulator and Nyberg concludes that even if they had reported these things to the regulator, the regulator would not have done very much about it. My feeling is largely that the difficulty is not an audit one per se, given the audit communications with the regulator and the regulator potentially knew, rather it is more a case that these prudential limits would have made tremendous sense, had they been adhered to we would be in much better shape today than we are and the question is why those limits were not adhered to by the regulator.