Mr. David McWilliams:

That is a very good question. A bank like UBS will have a bank analyst whose job is to look at banks all the time. The analyst would have been able to see the complexion of the loans given out by the Irish banks; how much was for tracker mortgages and how much was for commercial property, etc.

The person at UBS was doing what I had been doing for years previously, namely, trying to value the commercial property for which these banks were lending enormous amounts of money. One values such an asset by estimating the stream of income that will come from it and multiplying it by a multiple. UBS probably saw that the stream of income coming from Irish commercial property was falling because much of it was empty, similar to the ghost estate situation. UBS was saying if the stream of income from the commercial property goes to zero, the loan goes bad immediately. The only way the loan can be made good is if one continues to lend money against it, which is what happened in Ireland. This is the type of analysis UBS would have come up with and it would have said a chunk of the balance sheet could go bust. UBS would have asked what the share price of the company was and realised it was very high. Given UBS was not being paid to take such a risk, it would sell it.