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

Yes. In his testimony, Professor Black, who was a renowned regulator and prosecutor of financial institutions that failed in the United States, said that there was a recipe which banks followed which ... that if banks followed, which would "produce the worst losses and is most likely to cause hyper-inflated bubbles" and that recipe includes grow like crazy, and he mentions 25%, and he mentions growth way ahead of economic growth nationally, and also make terrible quality loans.

And Professor Black, you will have seen, said three sure things follow: record profits from the institution, then, quote, second: "Under modern executive compensation the senior leadership will promptly be made wealthy" and three, catastrophic losses. Now, gentlemen, can I ask you both, in view of the fact that Allied Irish Bank's growth in 2004 in its balance sheet was 25%; 37.5% in 2005. The bank made record profits in those years. The remuneration of senior personnel was at record levels and then there followed a huge crash. Do you recognise Professor Black's analysis in terms of Allied Irish Bank and do you agree with it?