Professor Patrick Honohan:

I thought I would have an opportunity to say this - it is worth mentioning - because a lot of people, including me, have been banging on about the subordinated debt. The committee had somebody here who was saying they were well paid to take this risk and that the committee might be interested to know how much more the subordinated debt holders were paid to take this risk of being bailed in. The two last subordinated debt issues made by Anglo Irish Bank, in 2005 and 2006, carried a risk premium of one quarter of 1% - 0.3% in one case and 0.25% in the other. These were tiny margins and there was some legitimacy in the argument made on the night of the guarantee that it was more or less regarded as risk free. It was regarded as risk free because they had such an exaggerated impression of how good Anglo Irish Bank was. It is extraordinary - one quarter of 1%.