Professor Patrick Honohan:

Okay. So there are two particular episodes: there's one episode which is at the time of the bailout, or the programme, and there's another one then at the end of March 2011, at the time of the stress test. So start with the November 2010. When I got back from Frankfurt on Thursday, 18 November, I participated in the first of these meetings, a high-level meeting, it was quite amusing because we talked about more or less procedural things. We were picking up from what we had discussed in Brussels. It was in Kevin Cardiff's room in the Department of Finance and there must have been about 12 or 15 people there, so it was principals, it was just, the senior people. And after an hour or two we broke, and maybe it was 8 o'clock, and we broke for sandwiches, and during the sandwiches, the IMF representative said, "Of course this is not part of our discussions but what about the bondholders? I mean, there are unguaranteed bondholders, how many of them are there? And just hypothetically, what would happen if there was some mechanism for imposing haircuts on them?" Well, this was the first we'd heard of anything like this, even after two days of meetings in Brussels.

And obviously, it was a strange attempt by the IMF to bring back on to the table something which presumably they must have ... had been brushed aside in their pre-meetings with the rest of the troika. So, this was our first idea that one of the institutions, at least, would support some mechanism for burden-sharing with senior bondholders at the banks. We were very excited by this ... on the ... there is a unanimous view on the Irish side that this was a great opportunity. Why? Because now we were in a period of three years, prospectively, protected by official financing so that any disturbances in the markets could be contained and also the reputation risk of burning bondholders would be greatly diminished if it was at the behest of the IMF, who know about these things. So immediately, this was a great plus. So, there followed in subsequent days, it was clear that the others didn't want this discussion to go greyface and they were uneasy and they said, "I think we should get back to the meeting proper now", and stuff like that. So, there were further discussions, not all of which I was involved in, over the coming ... the next few days. So that's that episode. Were the ECB involved in this? I know, Cathaoirleach, I know this is spoiling your time but-----