Mr. David McWilliams:

Sweden did exactly the same as we did at the beginning. I told the then Minister that he had reached the last resort. Sweden had reached the last resort in 1992. When it had a similar boom-bust cycle, it introduced a blanket guarantee of all deposits, excluding subordinated debt, and by this means it stopped a bank run. Our objective was similarly to stop a bank run. Sweden quickly realised it would have to set up a bad bank and it did so extremely quickly. It wrote down the assets very quickly and minimised the cost. However, it also devalued its currency by 40%. Once a country devalues its currency, it is back to life. What happened in Ireland's banking crisis was that, amazingly, not only did we not devalue our currency, but it actually increased in value between 2008 and 2010. Sweden cut its interest rates to zero, but our interest rates went up after the crisis. We had an extraordinary set of policies that even a student taking leaving certificate economics would know was wrong.