Mr. Brendan McDonagh:

I suppose to be frank with you, Senator, we were shocked. The European Commission didn't approve the whole validation methodology until February 2010, the end of February 2010, and we took the first loans across from the institutions, which was known as tranche one, at the end of March 2010, and, as the loan valuations were coming through during the month of March, and you know really hectic time for everybody because the Government wanted us to get on, the Central Bank wanted us to get on in terms of taking the loans across, you could see that the losses coming through were, you know, much higher than what probably anybody in the system expected. And it almost became an event, you know, NAMA are you doing this process correctly? You know these losses aren't expected ... you know, you know this has huge consequences for the capital of the banks and I suppose we had to ... we spent a lot of time as an executive but also at the board, looking at the valuations and saying, "Jesus they're much worse than anyone expected but we have a job to do and our job is to value the loans in accordance with the methodology approved by the European Commission and being able to stand over it" and that we did. And I think you know thinking back to the first tranche one transfers, which happened at the end of March 2010, myself and the chairman here did a press conference, I think there was complete shock in the country and also I suppose within the system probably leading up to that day in terms of the losses that were emerging, and obviously the losses got much higher as you went down through the portfolio. And I suppose it came to, I suppose a head really in September 2010 when the Government instructed NAMA to acquire the residual amount of the loans in bulk form and estimate the discount to what they would eventually be. And we estimated discounts and the discounts turned out to be, you know, 99% accurate-----