Professor Patrick Honohan:

Absolutely, without a doubt. I will set out where I think the €8.5 billion comes from. Obviously, the banks had a solvency problem and obviously the advisers from Merrill Lynch also believed there were solvency issues. Was the bank insolvent or not? That is a different matter. What they said was that in an extreme stress case analysis, write-offs in Anglo Irish Bank would deplete ordinary shareholders and other lower category subordinated debt by €7.5 billion. I am unsure whether that is €8.5 billion or €7.5 billion. They were saying that under extreme stress, essentially, most of the capital would have been wiped out. But that would have left a scenario where the Government would not have had to pay in a liquidation.