Oireachtas Joint and Select Committees

Thursday, 26 February 2015

Committee of Inquiry into the Banking Crisis

Context Phase

Professor Terrence McDonough:

Certainly the low interest rates did contribute to the problem. These are probably often dropped out of explicit consideration because interest rates in the European single currency market are determined by European policy. The interest rates were probably much more suited to Germany which was trying to come to terms with the reunification with East Germany and the economic problems created by that. The rates were certainly inappropriate to an Irish economy facing in to a serious housing bubble.

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