Mr. Michael Walsh:

It is completely non-factual. What actually happened, and you know I have actually touched on it already, on the Sunday evening of 7 September I got a phone call from Con Horan. As I say, I was in the society that evening because of the situation and the fragility of the markets. Basically, I was meeting at that time with Goldman Sachs and the clear direction from the regulator was that I should organise to meet with Anglo Irish. That was a direction that I got. When I say "direction", it was a phone conversation; it wasn't a written direction, obviously. Basically, the reason he was telling me to do that was because they had been looking at a contingency plan, as you know, with AIB and Bank of Ireland that hadn't operated. Apparently, Anglo had contacted the regulator to say that they might represent a solution. I was slightly surprised, but nonetheless the regulator wanted me to meet them. I accordingly organised to meet them the next morning. Having met them, I did a briefing paper for the regulator setting out the options as I saw them at that point in time. I met the regulator, discussed that options paper. I then revised and adjusted that at the regulator's request and submitted it to the Department of Finance. That paper is in the public domain. It was released I think at some stage as part of some of - I think - the disclosures in relation to the month of September and the night of the guarantee. I did not advocate the merger with Anglo. I certainly didn't advocate any situation where, shall we say, the State would take on the combined liability. That is a complete misrepresentation of the situation. What I actually advocated was that the society would continue as an independent entity with whatever changes the Government obviously wanted to make and to continue to operate the policy it had adopted the previous December, which was to wind down the society in a gradual and controlled fashion, which was what I felt was best for the society and best from a national point of view.

Anglo had a different agenda clearly. They wanted to be seen as the people who were rescuing the system because they had a belief that if they were seen to take over the society that they would be viewed as being systemic. They were very different to Nationwide; they didn't have depositors. You know, we had, I think, 180,000 depositors made up of residential, business as well as the commercial. They were purely commercial. We obviously had a large deposit book; they didn't have the deposit book. We had a large amount of liquidity; they were out of cash.