Professor Patrick Honohan:

The Government set new lending targets for the banks when the guarantee was in place. It used that control and additional lending took place. I do not want to be in the space of telling the banks not to bother about risk or the chance of default as I want them to shovel a particular amount of money into the construction sector. That is not the way it works. The Central Bank is not there to decide and steer the banks into particular areas. It is there to restrain them when they are going into areas that are dangerous or damaging or unfair to customers.