Mr. Dermot McCarthy:

I believe that the NESC, in relatively recent times, has produced a number of studies of what happened in the housing market including, it has to be said, its own misreading of some aspects of the situation when the housing report was produced in 2004. Why the dots weren't joined up in a sense is, I think, your question, Deputy, and that's something I've tried to reflect on. And part of the answer, I think, lies in issues which were raised before the committee by John FitzGerald and Alan Ahearne, that there was a ... there was a certain segregation of financial stability issues from others and, as Wright observed in his report in the Department of Finance, if you like, a bringing together of the different dimensions of risk weren't ... wasn't effected. It certainly wasn't communicated to the Government. I think we were perhaps distracted by a number of things which were ultimately peripherally important. Like, for example, we had no exposure to the US sub-prime problem, which seemed to be the initial origin of the international financial crisis.

The fact that our fiscal outcomes were so impressive and ... and, I mean, at a particular point in the mid-2000s, one of the tasks of the Taoiseach's Department was to organise the orderly management of the international delegations coming to see how the Irish situation was so successful. So there was, I think, ultimately, if you strip it all away, there was a failure of analytical rigour and I don't think that can be laid at the door of the political system.