Dr. Dan McLaughlin:

At the time I think, you know, some of them were stressing 20%, 25% falls in house prices, which would have been ... which had never happened. You know, the thing about once you'd remembered to put it into context is: when stress tests are done, you're looking at past data. Ireland had had experienced, since 1975, one year in which nominal house prices had fallen, and they'd fallen by 1.7%. One year since 1970 that GDP had fallen on an annual basis. So to put in stresses of 2% or 3% falls in GDP, 20% falls in nominal house price would have been severe. If you're suggesting that they should have had a stress test with a 67% fall in commercial prices, a 50% fall in residential prices, and a 12.5% fall in GDP, obviously they didn't, but at the time I don't think that was unreasonable. Plus, the major problem for the Irish banks wasn't just Irish commercial property; US commercial property prices fell 40%, and UK commercial property prices fell 35%. So I don't think it would have been reasonable at that time to have put in, given historical experience, to put in those numbers.