Oireachtas Joint and Select Committees

Thursday, 11 June 2015

Joint Oireachtas Committee on Finance, Public Expenditure and Reform

Fiscal Assessment Report: Irish Fiscal Advisory Council

2:00 pm

Professor John McHale:

If we were to say we should definitely do it later, we would be saying the markets are currently under-valuing. If we believe we know more about the value of AIB than the markets do, which is possible, we would want to wait. Even though the markets can get things wrong, as we saw in dramatic fashion coming up to the crisis, on the whole we have to be careful in betting against the market when it comes to valuing stocks. That means we can be reasonably relaxed about when we sell. If we sell now, we would get market value. The best guess as to future market value is probably the current market value. Therefore, I would not see it as an urgent priority to sell.

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