Oireachtas Joint and Select Committees

Wednesday, 20 May 2015

Committee of Inquiry into the Banking Crisis

Nexus Phase

Photo of Ciarán LynchCiarán Lynch (Cork South Central, Labour) | Oireachtas source

Okay, thank you very much. I just want to stay with one aspect of that, Senator, before I bring in Senator Barrett. If I can bring up core document page 55, group audit findings report, year ended 31 March 2008 and what this is is an audit findings carried out by your firm, Mr. Murphy and Mr. McDonnell, with significant audit risks and other areas of focus. Maybe if I can draw your attention to the very last section of the page, which relates to your dialogue with Senator O'Keeffe:

Assessment of ongoing concern.

The directors of a listed company are formally required to assess the company's going concern position annually. B[ank of Ireland] has continued to trade very profitably. However, in common with other banks [and I will return to this line in a moment, in common with other banks], there has been a significant increase in liquidity risk. Management's formal assessment of [on]going concern and in particular liquidity risk has only just been finalised. Accordingly, we will update the Group Audit Committee on our review of this assessment at the meeting [of the] 16 May 2008.

Now, Mr. McDonnell and Mr. Murphy, this is about five months before the guarantee, when Bank of Ireland, from earlier evidence here, were in a very crisis position. The comment there, "in common with other banks", can you please explain to me what that actually means? Is this or is it not a suggestion that there was some open dialogue amongst those in the wider financial community as to a general liquidity concern right across the financial sector?

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