Mr. Liam O'Reilly:

Thirty five people were in the regulation of banks. I think it was 32, I think, in 2000. It had increased to, I think, 45 in the ... in 2005. The principles-based approach was not one that was new to the Financial Regulator. It was ... it was actually one that was continued on from the Central Bank culture, I would have thought. And not alone that, but this was an approach that was being taken in all countries and the Basel accord and Basel requirements were setting out that that was the way that things were moving.

Indeed, the Basel II arrangements were going to be giving more autonomy to banks in determining how much capital they should hold by ... by stating that if you have your proper models in there, maybe you can reduce your capital. So, unfortunately, there was a mistaken view taken at that time as to who should be regulating banks and to what extent they should be self-regulated as opposed to having a full intrusive, aggressive system in place.