Mr. Charlie McCreevy:

No, it was a compromise that we came up with in the end, which more or less could be termed "the McCarthy compromise". That's named after the Secretary General of the Department of the Taoiseach, Dermot McCarthy. Can I just go back a little bit about this? We decided in 1998 that we should have a single regulatory authority. We set up the McDowell report to decide how this would be implemented. Why did we want a single regulatory authority? Well, I think if you read the early chapters of the McDowell report, it summarises very well the reasons for having a single regulatory authority, having it all in the one place, bringing all the supervision from different quarters. Up until that, you had the Central Bank involved, the Department of Enterprise, Trade and Employment, you had the Department of Environment ... Local Government, now the Department of the Environment, you had different regulations to do with credit unions, you had all this all over the place. So we thought the single regulatory authority was a good idea. Mr. McDowell was asked to chair an implementation group that had nine people on it, from the Department of Finance, the Central Bank, the Department of the Taoiseach and others as well. They came up with two reports, or two and a half reports; the majority came up with the single regulatory authority outside as an autonomous unit, outside of the Central Bank. The minority alternative model, supported by the Finance person - Tom Considine I think it was at the time - and the representative of the Central Bank, I think it was Mr. Barron, came up with the alternative model to keep it located within the Central Bank. And Dermot McCarthy, then subsequently had a slightly ... a variation of all that. There were differences of opinion as to its location, there was not a difference of opinion about having a single regulatory authority. The differences of opinion regarded where it should be located and constituted and that's what caused all the difficulty between us all. And the Dáil debates are very, very interesting.

Not alone was there a difference between the Department of Enterprise, Trade and Employment, namely, the Tánaiste, Mary Harney, and myself, but there was also a difference between the political parties. Deputy Derek McDowell, who represented the Labour Party, was for the independent model advocated by McDowell. Michael Noonan, who was then the spokesperson for Fine Gael, was for the model that we were for in Finance, keep it within the Central Bank. In fact, if you look at one of the Dáil parliamentary question debates, you see where Michael Noonan has a funny aside with Derek McDowell and he says, "So, you're a PD at heart", or something like that. You can look up the Dáil debate to see that.

So therefore, it wasn't anybody was coming at this from mala fides but there was a difference of opinion and as I said in my witness statement, over Europe and further afield, there was not a universal way of doing this. Other countries had different ways of doing this. So finally, we came around and we came up with this compromise solution which I would term more "the Dermot McCarthy kind of solution" which had this overarching body, the Central Bank of Ireland self-regulatory authority and within that, we had the regulatory authority known as IFSRA, and we combined the two bodies together.

Now, subsequent to the economic collapse, as I said also in my opening statement, people have gone back to having it all within the Central Bank. And by the way, the United Kingdom, in 1997, were also in the process of diversifying out as well and reverting and they also have gone back, more or less, to a single model as well. So, it's not that anybody came this from mala fidesincluding the politicians, it's just that there was an agreement on all this and how to reach it. So, that's how we came about it.