Professor Philip Lane:

We will have to write to the Senator on that matter because I am not directly or instantly familiar with what the Central Bank said at that time. No matter who was involved in these conversations back at the worst time of the crisis, it is an interesting issue and interesting for the future as well to think about this matter. There were concerns back in the worst of the crisis that maybe not enough was being done in terms of investment for the future. Clearly, in terms of the overall austerity, public investment took a big hit during the crisis. One of the lessons for the future is at what level of austerity does one cause long-term damage.

In terms of learning from how the crisis was handled, it was important for Ireland to do a lot of fiscal consolidation. Clearly, one of the potential cost factors was excessive pessimism about the future. Those were some very dark days.

In terms of reasonable expectations and taking a long-term perspective, we can continue to look back and assess that. We have ended up in a situation where there is a supply deficit and although housing and construction are moving more needs to happen. There is some supply response now but it is an ongoing challenge. The instruments for dealing with that remain with the other arms of the State and not with the Central Bank. Our role is to keep the financial system safe and protect consumers, and through our mortgage measures we are doing so. The construction industry and policies towards construction involve genuine political choices. It remains the responsibility of the political system to make those choices.