Joe Higgins (Dublin West, Socialist Party) | Oireachtas source

Yes. Thanks, gentlemen. If I could reprise very briefly the issue that was raised at the beginning of the meeting in relation to the type of securities or non-security that the banks required for large loans. Just very briefly to quote Mr. Daly. You said the "developer's equity contribution was a form of a rolling up of unrealised paper profit from other developments." You said, "In reality that amounted to nothing more than unrealised equity positions, levered by the developer to secure funding for new transactions." You said:

The safety zone of borrower equity usually existed only on paper. ... In the event of a crash the banks stood to take 100% of the losses [. That is] what happened.

You said, "the model did not appear to require a stringent approach by borrowers to analysing project feasibility." And finally, Mr. Daly, you said:

Very little, if any, consideration was given to the inherent cyclical nature of the property markets. The attitude appears to have been that the only way was up, that somehow the forces of gravity were suspended as far as the Irish market was concerned, and the long established pattern of property market cycles was no longer relevant.

Now, Mr. Daly, when the Chair asked you, you weren't prepared to say, or you couldn't say, because you hadn't direct knowledge, that the relationship that was the subject of this, these actions, was as a result of a deferential relationship between a borrower and a lender. I can understand why you would say that. But would you say, objectively speaking, what you found showed a reckless behaviour by the banks?