Professor Patrick Honohan:

So, first of all, the funding cliff did not become evident in May 2010, the funding cliff was evident ... certainly from the time that I started in September 2009. I constantly asked, as I said earlier ... they kept on saying "Well, there's going to be these maturities of debt in this week and that week." I asked "When is the worst month?" and they said "The worst month .. the next month is always the worst month, but after that it's September 2010". And that's because, after the guarantee, as I understand it, the banks issued bonds and deposits to mature at or before ... shortly before the guarantee. So it was well known this was going to be a cliff; so we're going to have to do something to build sufficient confidence in the banking system that the depositors, when they get to the end of September, will say, "Oh yeah we'll just roll that over for another year". That's, of course, what we failed to do. But what did we ... how did we try to do it? We tried to do it by getting a ... convince ... to take the uncertain bad loans from the property developers - which were the big problem: if they weren't there we wouldn't have this problem, take them off the banks' books, recapitalise the banks and keep the public finances obviously in a convincingly convergent way. This was the game plan, and it didn't work. Why did it not work? It didn't work because the losses were too big and because ... then in September-----