Mr. Ronan Murphy:

PwC Ireland is a member of the PwC global network and in that context the senior partner's role is to ensure that new practices and procedures developed in centres of excellence in other parts of our network are effectively rolled out in the Irish firm.

Chairman, I was directed by you on 12 March to attend this meeting of the committee this morning. I responded to you on 27 March and I think it's appropriate that I read out a paragraph from that letter as follows:

Further to your letter of 12 March ... directing me to attend before the Joint Committee, I would like to point out to the Joint Committee that I have not practiced as an auditor since my appointment as Senior Partner on 1 July 2007 and, furthermore, prior to that date, I acted [almost entirely] on non-financial services entities. Accordingly, as I have never been an auditor to a bank, I request that I be granted the option of being accompanied by one of my financial services partners so that I can fully respond to the key themes and lines of inquiry when I attend before the Joint Committee on 20 May.

Chairman, the firm appreciates your consent to this and accordingly I'm accompanied by John McDonnell this morning and I will shortly pass over to him to permit him to make his opening remarks.

As requested, Chairman, I submitted my written statement on behalf of the firm on 22 April. The statement addresses the five key themes which I was directed by the committee to cover. In summary, these themes are: integrity of financial reporting; appropriateness of property-related lending strategies and risk appetite; the liquidity versus solvency debate; the adequacy of the assessment and communication of both solvency and liquidity risks in banking situations, institutions and sectors; and capital structure and loss absorption capacity. Chairman, I'm happy that if you wish, that this statement can be taken as read. However I think it's appropriate that I read the short conclusion included in the statement. Our conclusion is that audits in the period from the start of the financial crisis were clearly challenging due to the inherent uncertainty facing the Irish and global economies and the particular issues faced by Irish banks. The loan loss provisions were clearly a material estimate in the overall set of financial statements on which we expressed an opinion. We stand over the quality of the audits of the financial statements of Bank of Ireland and the robustness of the audit opinions issued on the respective reporting dates.

Chairman, my colleague John McDonnell and I would be happy to answer questions from the committee and to explain to the committee how we arrived at this conclusion and why we believe this conclusion was appropriate.