Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

Thank you Chair, you are welcome back Mr. Cowen. From August 2007 there was turmoil in the financial markets. In September 2007, we had queues on the streets of Dublin as customers of Northern Rock sought to take out their money. Now, in November 2007, the domestic standing group was told, and it's on a document which is on your screen now Mr. Cowen, the domestic standing group was told of a ... an increased risk of liquidity issues arising for Irish banks into 2008, if present market conditions persisted. There was a reference to the banks making contingency plans and there was also a reference to negative international sentiment regarding the Irish banking sector and the Irish property market generally. So this was in November 2007. Now, in January 2008, in a financial stability issue scoping paper, which I'll put up in a few moments, looked at a range of scenarios including an institution being illiquid but solvent, the scenario of an insolvent financial institution, it looked at an examinership process and in view of all of that Mr. Cowen, my question for you is, given the possibility - and it was clearly a distinct possibility - that a State intervention in the banking system would be required in the following months, why was it not considered to be a good idea for someone to go in and examine the underlying financial health of the institutions, given that there was a likelihood that the State was going to have to intervene? And by that I mean look at the quality of their loan book, look at the quality of the underlying collateral or security, look at the concentration risk in property construction, why was that not done as soon as the warning flags were beginning to be waved?