Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

Thank you very much Chair and I'd like to welcome Mr. Daly and Mr. McDonagh here today and thank them for their opening statements. If I can just start, I suppose, standing back from the detail, Mr. McDonagh in particular, one of the issues that we are tasked with examining is to assess the appropriateness and the effectiveness of the policy responses to the crisis and the establishment of NAMA was a key part of that and on page 9 of your opening statement I think you seek to address that, Mr. McDonagh. We know the direct consequence of establishing NAMA. NAMA bought loans with a par value of €74 billion, paid €31.8 billion, so it resulted in losses of €42 billion hitting the accounts of the participating financial institutions. The obvious alternative could have been to leave the loans relating to the property and development sector on the books of the banks and work them out over time. You seem to come to the view that the establishment of NAMA was the correct course of action. You say it is recognised that impaired banking systems do not tend to rectify themselves so what's your basis for saying that and your basis for believing that the establishment of NAMA, and how things worked out subsequently, was a better outcome?