Mr. Cormac Butler:

It may have been the case that there was a close relationship and the Government knew but that would mean the Government was telling a lie when it said the banks were solvent. I do not think one could prove the Government knew the banks were insolvent. I might be wrong but I do not think one could prove that.

It is certain that, during the banking inquiry, one witness from the Central Bank, I think it was Mr. John Hurley, gave evidence that he assumed that all banks were solvent in 2008. He based his knowledge on a report by PwC, which stated that all banks had sufficient capital to withstand future losses. It could be that some people decided to put this out despite knowing it was completely false but I do not think one could come up with evidence to prove that. In 2008, very few people outside the accounting and banking professions knew that banks were not measuring losses correctly. In fact, in 2008, the International Accounting Standards Board, which designed the international accounting standards, stated in a prepared speech and a letter that, under its rules, banks are not allowed to hide losses. It would not have been able to say that if the world had known the banks were insolvent.