Mr. Fergus Murphy:

So banking has been about the disintermediation, and the intermediation, even, between borrowers and savers. And so banks legitimately run some of that intermediation; sometimes they call it "curve risk". It needs to be managed very, very carefully in terms of interest rate risk, and in terms of, even more importantly, funding and liquidity risk. And that's why ... or one of the main reasons why the Irish banks and banks elsewhere came to the situation they came, because they didn't, and they couldn't, manage their funding and their liquidity.

So it needs to be managed, Senator, in a very conservative way. There needs to be very strict limits around, maximum tenors and maturities. There needs to be strict discipline and rules around the make-up of the liability base, the components of it, making sure that the organisation has a good mix of liabilities, and that the duration of the liabilities of the organisation matches, inasmuch as it can, the asset duration. It's not possible to match them directly and typically, assets will have a longer duration than liabilities. But if an organisation has proper rules around their asset liability, management and their committee, you can manage that intermediation in the marketplace sensibly. Unfortunately, what happened in Irish banking was that, clearly, it wasn't managed sensibly at that point in time.