Mr. John Hurley:

In 2008, Senator, as the crisis, as the liquidity crisis was taking hold, we were in a slightly different situation in relation to our assessments on financial stability, which I discussed earlier. All of the signs in 2007 was that this adjustment would take place ... the adjustment in values would take place. Yes, there would have been a very significant fiscal problem, but that fiscal problem, you know, in my dialogue with the Minister, they were quite aware there was a fiscal problem but there was a confidence that they'd be able to manage this fiscal problem. So the actual collapse didn't come until much, much later. At that time, there was still a great expectation that this could be managed in terms of the gradual or the soft landing, with significant action being taken on a fiscal adjustment. Ministers and the Government knew we couldn't continue to build at the level we were building in terms of houses, and they knew that there was an overvaluation element, but there was a confidence that it could be managed because economic growth was still extremely strong, the prospects for growth were strong and we didn't have the emergence of Lehman's and the disaster that emanated from the United States.