Mr. Simon Carswell:

I am not up to speed on the entire changes that have been made in the accountancy profession in response to the crisis but I can speak about the way things were then in regard to the posting of provisions, that is a bank setting aside money because it expects a certain part of its loan book to go bad and this was very much under-provisioned. I think the crisis showed that banks needed to put aside rainy day money so that should things go bad they would have enough general provisions. There was an attempt, very late in the day, to apply general provisions. After the guarantee period, the banks were saying that the loans had not gone bad but they had put aside a pot of €500 million in case they do. That should have been going on for years, even during the good times but because the credit markets were doing so well, the problems with loans were covered by a rising market. That is what really shrouded all of the problems that occurred in the accountancy profession.

In response to the Deputy's question on how auditors should be appointed, I certainly think there should be a rotation of auditors much more frequently than there had been. I think that would apply a fresh set of eyes to a set of accounts or financial statements. With the nature of auditing, they may need to bring in some future forecasting as well. That might require auditors to hire economists, mathematicians or people who can look ahead and foresee potential problem when one has 50% of the loan book in a particular sector that if the following ten things should happen there could be problems. Auditors will say it is all about looking backwards, but I think there needs to be a focus on forecasting, but as I have said, I do not know if the changes cover that.