Professor Philip Lane:

It would not be the correct interpretation to say the report on the liquidity breach did not trigger considerable action very quickly. In early October there was an inspection by the Central Bank and the conclusion was that the breach did not suggest wider or more systematic erosion of overall liquidity regulations. I accept that there might be a difference of views on this investigation and the beliefs of Mr. Sugarman. There was a second wave that involved not just our own understanding of the issue when, as a cross-check, an independent third party firm was engaged to go over it again. There have been two waves of investigation, but the conclusion was that there was not a systematic breach of liquidity regulations. To underline this, we considered the particular case to be closed at the time. We will undertake to respond. If the committee writes to us, we will, of course, always write back.