Professor Patrick Honohan:

In so far as the residential mortgages are concerned, the BlackRock model assumed that there'd be a lot of actual losses incurred in a short period of time. And that's because they were applying a model that worked in the United States, where you stop paying, you walk away, the bank seizes the property, sells it, and they've realised the loss and they're out. That's not how it happens here as we know. So what's happened since then is that the actual rate of arrears increased faster than the BlackRock model predicted but the rate of losses has been much slower. There have been very few actual losses realised.