Mr. Paul Gallagher:

Firstly, I don't remember being involved because obviously it was a policy decision in raising the guarantee. But I do know that one of the concerns following Northern Rock was that the existing scheme went to €20,000 and 90% of your deposit, and I think it may be in some of the documents. When depositors see that they're going to get 90% not 100%, well somebody says it's rational to queue outside banks. So you don't want to lose your 10%, so you queue. So one of the things was the guarantee was increased from 90% to 100% of the limit. The other view that was taken and in fact, if anything, it seems to me to show foresight, because as of 2009 the EU brought in a directive, and I mentioned this, increasing the cover to €100,000 throughout Europe. Admittedly, that wasn't to take effect for a while because it's the form of directives that they don't take effect for a while, 2010. The view was taken that, because there had been some queues outside banks, I think it's been mentioned there was a media issue and queues had been forming and I think there was a real concern. Even Dr. Somers said the one thing you don't want to see is a queue outside the bank, so you try and stop that.

I certainly, going on to the night of the guarantee, didn't witness exuberance of any sort over ... or any type whatsoever. They were people, so far as I could see looking on, that were being faced with a decision that nobody wanted to be there to have to make and the options were explored, very careful consideration was given to those options, and so far as I could see, a judgment was made on what is the least worst option, on the basis of a fear of what might happen the following day. They may have been right or wrong, but that was what they face. And, in a sense, we'll never know, because nothing happened the following day, but if the guarantee hadn't been given, who can predict what was said, and what I say in my notice, we were told that New York Stock Exchange was expecting the markets in Dublin wouldn't open. Now, if there's a run on the shares of the banks, that effects the shareholders, but as soon as anybody sees that run, it's all over the media and nobody is going to do anything other than queue outside a bank and try and pull their money out because if the shares are tanking, then the bank is about to collapse. So that's what was at issue, but there was certainly no sign of exuberance that I saw; far from it. I think what was impressive was people remained calm in what was a crisis situation and worked through the options.